Reinsurance renewal rates fluctuated widely at Jan.1 renewals, with catastrophe losses and a constrained retrocessional reinsurance market driving property rates higher while casualty rates rose in a narrower range. Last week you were reading 2022 – The Age Of Online Insurance. This week we’re bringing you:
Liability rate hikes ease as competition increases*
Unusual loss trends in 2021 called on the property & casualty insurance industry to play its role as the economy’s financial first responder. A look back at the most extreme loss patterns of 2021 sets the stage for the insurance-related issues we expect to dominate the 2022 public policy agenda. Loss experienced in 2021 boil down into two mega-trends: violently volatile weather events and shockingly large liability awards.
The magnitude of insurance losses from catastrophic weather and from gargantuan civil litigation awards is a clarion call for legislators, regulators, individuals, businesses and insurers to act to protect lives and property from avoidable loss. The loss experience of 2021 is pressuring insurers to respond in several ways. First, insurers are challenged to be creative and relevant, providing protection to individuals and businesses against risks new or larger than heretofore experienced. Second, insurers must improve in protecting their capital base against risks large enough to imperil balance sheets. To be sure, in 2021, largely as a result of Hurricane Ida, two Louisiana insurers and one Florida insurer failed, and a dozen more Florida insurers are on the Florida Office of Insurance Regulation watch list. Third, insurers must push back against tort trends contributing to outsized awards bearing no relation to damages sustained.
Insurance Business America is seeking the country’s fastest-growing brokerages*
Commercial property insurance markets have stabilized and commercial liability insurance rates are rising more slowly, according to USI Insurance Services Inc.
Valhalla, New York-based USI said Tuesday that non-catastrophe exposed property accounts with good loss history, which renewed at the end of 2021 at flat to up 10%, will move to renewing down 5% to up 5% in the first half of 2021.
The broker said while property markets are still volatile, buyers and policyholders are being differentiated by risk. “We are seeing the market stabilize overall — and this benefits commercial insurance buyers that maintain quality risks with strong data to back them up.”
General and product liability lines, meanwhile, are expected to rise 5% to 15% in the first half “with a growing number of policyholders seeing flat to 5% increases as the year progresses,” USI said.
Excess and umbrella coverage, however, continues to be “adversely impacted” and capacity is being deployed selectively. Rates are expected to rise 10% to 35% or more in the first half, with smaller increases of 5% to 15% in the middle market.
Cyber coverages are expected to rise sharply, 40% to 50% for optimal risks and 50% to 100% or more for less optimal risks, as “ransomware attacks continued to plague the cyber insurance market throughout the second half of 2021.”
For public company directors and officers coverage, primary is forecast at flat to up 20% in the first half of 2022 while excess is expected to be down 10% to up 10%.
Reinsurance renewals vary significantly by line*
Customers’ buying behaviours have taken a turn towards technology through the pandemic and now some predictions have been made on what the landscape of the industry will look like in 2022.
“The data we collect comes from a network of comparison shopping, research and lead generation websites across all lines of insurance,” Jeff Piotrowski (pictured), market leader, insurance, at Jornaya, told Insurance Business.
Whether its auto, home, or health, looking at the data on purchasing behaviour provides valuable insights on who and how many clients are looking for quotes and where.
“We’re seeing about 400 million online shopping events across over 55,000 different comparison-shopping sites,” he said. “We do so with the consumers’ privacy in mind. Data about a consumer’s personal information or identity isn’t needed.”
Through the pandemic there was an increase in online shopping activity for insurance, and Piotrowski explained that a lot of that can be attributed to macro-economic factors.
“Premium giveback programs began running in commercials we now see during daytime television as we’re all working for home, which awoke customers who may not have shopped for the policy otherwise,” he said.
Consumers were either unaware of premium givebacks previously or saw a rival carrier offering steeper discounts – which was well-timed given the tightening of budgets globally. However, that wasn’t the only influential factor, according to Piotrowski.
Finding highly affordable leads to keep sales coming in
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