Premium prices have increased as announced in the Q3 2021 Commercial Property/Casualty Market Index report from the Council for Insurance Agents and Brokers (CIAB). Once again, the largest increases were seen in cybersecurity, umbrella and directors & officers (D&O) lines. Workers’ compensation was the only premium experiencing a decrease.
We’ve reviewed the most significant commercial lines trends to help you prepare for upcoming renewals or applications.
Cyber premiums continue to feel the affect from an abundance of cyberattacks. This quarter’s average price increased to 27.6%, up from the Q2 figures. These significant increases are directly related to elevated frequency and severity of cyber claims. Ransomware was again identified as the primary contributor to these cases.
Additionally, cyber theft has become more common as organizations are incorporating remote work into their normal operations. Unfortunately this situation provides hackers easier access to company data. Claims have also exposed lax controls of network security. As cyber events do not appear to be slowing down, expect to continue to see increases in premiums, decrease in availability and stricter underwriting.
Premiums for umbrella insurance continued to experience price (+16.9%) and capacity issues. Peaking in Q3 2020, the market is seeing some reprieve as restrictions appear to become more relaxed and options are opening compared to previous reports. Regardless, Umbrella continues to be challenging and it is still unclear whether there is potential for recovery in future quarters.
Cyber coverage is once again the direct focus for changes in underwriting. Cyber reviews and requirements have become extremely demanding. Some clients are even seeing premium increases exceeding 300% and higher deductibles regardless of loss experience. Insureds are being required to demonstrate proactive cybersecurity measures including multi-factor authentication (MFA), endpoint detection/response and cloud backups.
Additionally, notable premium increases for umbrella, commercial property, employment liability and D&O are also reporting tighter capacities, elevated deductibles and increased coverage restrictions. Carriers appear to be consistent with hard market conditions including disciplined underwriting, heightened scrutiny and capacity limits.
We’re Here to Help
Even though these trends and impacts are not the ones that we want to see, it’s better to be aware of them now. We recommend adapting early for renewals, take the time to prepare your business for the future that lies ahead. If you need additional risk and insurance solutions to help offset these increases, please connect with a member of our team.