The professional indemnity insurance market for architects and engineers continued to see healthy growth in 2022, but new challenges face the sector this year, according to a report Wednesday from specialty broker Ames & Gough.
Most insurers saw “substantial” premium growth for the second straight year, with a majority reaching double-digit percentage increases, the McLean, Virginia-based brokerage reported. Overall, 81% of survey participants reported an increase in their professional liability premium in 2022; 13% saw premium levels unchanged; and 6% had a reduction in premium.
Among insurers reporting premium growth, more than a third saw growth of 20% or more; a quarter reported growth levels of 11% to 15%; and nearly a third had premium increases of 6% to 10%.
This year, however, insurers will seek to counter the effects of continued worsening claims experience as well as lingering issues related to the pandemic, including claims backlogs, labor shortages, supply chain disruptions and the effects of both economic and social inflation on claims costs, the report said.
Ames & Gough said the report was based on survey responses from underwriting executives at 16 leading insurance companies that provide architects and engineers with professional liability insurance and that together represent “a significant share of the current total market for this coverage.”
Survey respondents included American International Group Inc.’s Lexington unit, Beazley PLC and Berkshire Hathaway Specialty Insurance Inc.