As the world inches closer to a post-pandemic economy, businesses will face a new risk landscape shaped by the challenges of the past year and a half.
The hard market conditions continue to affect property and casualty business lines. However, even in a tough market, businesses can take steps to improve their risk profiles, reduce costs and ultimately increase profitability, said Robert Meyers, senior vice president and property & casualty leader at USI Insurance Services, in the broker’s 2021 Mid-Year Commercial Property & Casualty Market Outlook report.
The report highlights rate changes across six lines of P&C business and also identifies the trends that will impact insurance clients through the remainder of this year.
According to USI, the property market remains the largest loss drag on P&C industry profits, with insurers reacting by reducing capacity, increasing deductibles and changing coverage terms.
The casualty market is also facing many pressures, such as selective underwriting, rate increases and more. “Umbrella/excess insurance is still the most challenging casualty market, with average rate increases of 15% to 25%,” writes Meyer in the report. “New market capacity is slowly being introduced, but it will take some time for this capacity to have a beneficial impact on the market in terms of initiating competition and moderating rate increases.”
Insurance to see hard market conditions across lines in 2021
According to Willis Towers Watson’s 2021 Insurance Marketplace Realities Report, hard market conditions are expected to continue into 2021, with rate increases in almost every line.
The most affected lines will be property, umbrella, directors and officers (D&O), and fiduciary, followed closely by cyber insurance. Non-challenged properties are predicted to see increases of 15% to 25% in 2021, while umbrella increases will stagger from 30% for low-moderate hazard to 150% for high hazard excess. All categories of D&O are expected to see double-digit increases in 2021, with some as high as 70%.