North American commercial insurance buyers are seeing rate increases ease across many lines of coverage, but rate increases for property insurance will continue to accelerate, according to a report published Thursday by Willis Towers Watson PLC.
While the economy and financial markets remain relatively healthy, property insurance premiums will increase as much as 40% plus for vulnerable people, WTW said in its Insurance Marketplace Realities 2023 Spring Update.
This compares with property interest rate increases of 10% to 15% on average a year ago and 20% to 25% increases in unique situations, WTW said.
“Recent macroeconomic factors and climate-driven property losses [from the first quarter of 2023] suggests that property insurance rates won̵7;t decrease anytime soon, WTW says.
Political risks will also increase by up to 45%, driven by the ongoing conflict between Ukraine and Russia, concerns over tensions between Taiwan and Beijing and the military conflict in Sudan, WTW said.
But within management liability lines, liability levels for directors and officers continue to decline, with some buyers seeing up to 30% reductions and the most challenging risks to renew, WTW said.
Cyber renewal rates have also slowed and are mostly flat, with the most demanding risks leading to increases of nearly 10%, WTW said.
“While the economy remains predictably uncertain, market softening across many industries is creating opportunities for buyers,” said Jon Drummond, head of brokerage, North America at WTW.