The Commercial P&C market continued to harden in Q1 for many lines and shows no signs of slowing down. According to a Council of Insurance Agents & Brokers (CIAB) survey, the average premium increase for accounts of all sizes was 9.3%. Rates for medium-sized accounts rose 9.8% and large accounts climbed even higher to 12.6%.
All major lines, except for Workers’ Comp, experienced premium hikes. Umbrella saw the greatest increase with rates escalating to 17.3%, in part due to high claims activity. Primary and Excess Commercial Auto remains a tough market, especially for large fleets. Frequent and severe claims caused rates to increase by 9.6%.
Commercial Property experienced an average premium increase of 12.0%. All Risks, Ltd. property brokers report CAT-exposed property rates up 15-20% for routine placements with pricing for older, more challenged occupancies/higher demand areas in the 20% and higher range. CAT property with losses rose 40-50% as did tougher accounts previously underwritten by a single carrier, due to capacity restraints.
Most coverages saw increases in reported claims, forcing carrier underwriters to tighten underwriting guidelines, decrease limits, significantly reduce capacity, increase deductibles, and require loss control measures. In addition to the five major lines, premium prices for construction risks increased 6.4% and Business Interruption rose 6.7%.
Will COVID-19 make the market even harder? Pandemic-related claims for lines including Business Interruption, Cyber, and Commercial Property will certainly have an effect, the significance of which remains to be seen.
Now is the time for coverage education and communication between brokers, retail agents, and insureds. Do your clients have adequate excess limits? What risk management measures are in place to drive down the cost of exposure losses and improve your client’s risk profile? COVID-19 has proven the “it won’t happen to me” theory for purchasing insurance can be risky and ultimately very costly.
Our brokers can help answer tough questions. We have property and casualty specialists with coverage and class expertise and exclusive programs only available at All Risks to meet the requirements of hard-to-place accounts. We also have long-standing partnerships with top tier carriers to ensure access to the coverage, capacity, and limits your insureds require.
As renewals and new business placements become more difficult, our brokers will exhaust all efforts to ensure your clients get the best coverage at the best possible rates.