Commercial buyers seeing rate hikes abate: WTW
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North American commercial insurance buyers are seeing rate hikes ease in many lines of coverage, but property insurance rate increases will continue to accelerate, according to a report issued Thursday by Willis Towers Watson PLC.
While the economy and financial markets remain relatively healthy, property insurance rates will increase by as much as 40%-plus on challenged occupancies, WTW said in its Insurance Marketplace Realities 2023 Spring Update.
This compares with property rate hikes of 10% to 15% on average a year ago and 20% to 25% increases in unique situations, WTW said.
“Recent macroeconomic factors and climate-driven property losses [from the first quarter of 2023] suggest property insurance rates will not be abating anytime soon,” WTW said.
Political risk rates will also increase by up to 45%, driven by the ongoing Ukraine/Russia conflict, concerns over tensions between Taiwan and Beijing, and the military conflict in Sudan, WTW said.
However, in management liability lines, directors and officers liability rates continue to decline with some buyers seeing up to 30% reductions and the most challenging risks renewing flat, WTW said.
Cyber renewal rates have also declined and are mostly flat, with the most demanding risks prompting increases of nearly 10%, WTW said.
“While the economy remains predictably uncertain, the softening of the market across many lines of business is creating opportunities for buyers,” said Jon Drummond, head of broking, North America at WTW.
