Commercial Lines Insurance Market Trends Report for Q3 2022

Commercial Lines Market Trends Report – Q3 2022

The Council for Insurance Agents and Brokers (CIAB) announced premium price increases in their Q3 2022 Commercial Property/Casualty Market Index report. Significant growths were seen within the cybersecurity (20.3%), umbrella (11.3%) and commercial property (11.2%) lines. Market conditions continue to harden as an average premium increase of 8.1% was up from 7.1% in Q2 2022.

We’ve reviewed the most significant commercial line trends to help you prepare for upcoming renewals or applications. 

Commercial Property

The U.S. continues to struggle with inflation as the Consumer Price Index (CPI) historically reached 9.1% this year — the most significant increase since November 1981. The impact of inflation has been more significant despite numbers slightly lowering during Q3 2022 (11.2%).

Property insurance continues to suffer from inflated repair and rebuild costs, as well as construction worker shortages. Prices have skyrocketed from supply chain issues related to essential building materials Commercial property insurance applicants should expect underinsurance influences such as:

  • Requests for updated property valuations
  • Premium increases
  • Coverage restrictions   

Experts believe extreme weather events are the new norm and have influenced upsurges in commercial property premiums. Catastrophic events (e.g., Hurricane Ian, Kentucky and Tennessee floods, Northwest wildfires) have become more frequent and severe and have inundated the market with claims. Flood insurance claims alone were up 31% compared to only 8% in Q2 2022. Insureds with greater risks for catastrophic natural events should expect significant rate increases, capacity restrictions and higher deductibles.

Commercial Auto

Marking the forty-fifth consecutive quarter of increase, commercial auto premiums saw a 7.6% increase during Q3 2022. Experts attribute the increase to surging repairs and claims, worker shortages and supply chain disruptions.  Specifically, higher claims payouts are attributed to increasing repair and vehicle replacement expenses. The influx of claims is attributed to consumers’ relaxation of pandemic-related isolation and more employees returning to the workplace. These conditions will impact policyholders with heightened premium expenses and coverage restrictions.

Cyber Liability

Notably down from the second quarter of 2021 (26.8%) and a record high in Q4 2021 (34.3%), premium pricing for cyber increased by only 20.3% in Q3 2022. Experts suggest cyber rates are seeing some stabilization when insureds have the right controls in place. Insureds should expect higher deductibles, ransomware sub-limits and cyber extortion coverages. Those who are aggressive with their cyber risk mitigation strategies could discover some relief. Suggestions include:

  • Start the cyber insurance renewal process early and prepare to provide supplemental applications regarding your cybersecurity prevention policies and practices.
  • Take advantage of loss control services from insurance carriers to strengthen cybersecurity measures.
  • Focus on employee training to prevent cybercrime from affecting your operations.
  • Establish an effective, documented cyber incident response plan to minimize damages amid a cyberattack.

We’re Here to Help You Understand the Market

While these trends and impacts are not necessarily what we want to see, being aware is half the battle. 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, connect with a member of our team.

Commercial Lines Market Trends Report – Q3 2022 prices have again increased as announced in the Q3 2022 Commercial Property/Casualty Market Index report from the Council for Insurance Agents and Brokers (CIAB).2022-12-07T18:00:00-05:00Premium prices have again increased as announced in the Q3 2022 CommercialProperty/Casualty Market Index report from the Council for Insurance Agents andBrokers (CIAB).Risk MitigationProperty & Casualty InsuranceYes