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Commercial insurance buyers could see price hikes soften in 2022, though buyers will still be paying more for their insurance, according to one brokerage’s predictions.
In its 2022 Insurance Marketplace Realities report, Willis Towers Watson, an insurance brokerage and advisory company, predicts a “welcome deceleration in premium rate increases.”
After several annual cycles with steep price increases, the marketplace has taken significant steps toward “correcting” itself, Willis Towers Watson reported.
“For the most part, we are moving toward stability as we watch the workings of a simple economic law — supply and demand,” said Jon Drummond, a senior editor of the report. “That does not mean, however, that this is a simple marketplace.”
Willis predicts stability across insurance lines, with two exceptions: cyber liability and fiduciary liability insurance. Rates for cyber insurance are increasing as losses rise and market capacity tightens.
One area of good news for buyers, Directors and Officers (D&O) liability prices are easing. “Looking ahead, some D&O buyers may see no increases at all – the first time in a long time,” the report said.
Overall, the number of insurance lines anticipating flat renewals or a mix of increases and decreases jumped from one line to eight lines, according to the broker’s latest predictions.
Some of the report’s pricing predictions include:
- For executive risks, primary D&O for public companies will see flat to 25% rate hikes.
- D&O for private/non-profit (overall) should go up anywhere from 5% to 40%.
- Errors & Omissions (E&O) should see rate hikes go up between 5% and 10%.
- Employment practices liability (primary) should jump 10% to 30%
- Commercial property cover for non-challenged occupancies should go up between 2% and 10% in 2022, but challenged occupancies should see hikes of 15% or more.
Check out the 2022 Insurance Marketplace Realities report here.
