قالب وردپرس درنا توس
Home / Insurance / Increases in responsibility ease as competition increases

Increases in responsibility ease as competition increases



Most buyers of general liability insurance and extra liability insurance paid more for their coverage at the turn of the year, but the rate of increase was lower than the sharp price increases in recent years and some buyers received price reductions.

Increased competition among new and established insurance companies, a feeling that increases over the past three to four years have improved insurance companies' profitability and lower losses due to the continued closure of many courts, combined to keep average single-rate increases in single-digit and surplus interest rates in low double digits, brokers and insurers say. [19659002] In addition, insurers are in some cases withdrawing disease exclusions that were introduced at the outbreak of the covid-1

9 pandemic, but they are introducing stricter insurance terms for accounts that are exposed to "forever chemicals" or risks of sexual abuse, they say.

Interest rate hikes will come likely to continue

General liability y prices increased by single-digit figures on January 1 renewals and more increases are likely for the rest of 2022, says Chris Kopser, New York-based chief underwriting. officer, primary accident, for Americas on Axa XL, a unit within Axa SA.

“Interest rate hikes will continue as the severity rate continues to exceed the pace. It's just that simple, he said. "We've definitely seen legal claims cross the border more often." major account misfortune, in Liberty Mutual Insurance Co.'s global risk resolution department.

"Going forward, the market is still in a position to need interest rates, to keep pace with that trend," he said. Although there was a pause in so-called social inflation when the courts closed during the pandemic, insurance companies expect the trend of increased court rulings and settlements to return, he said. Buyers can get interest rate cuts by moving their programs to other insurance companies, says Andre Eichenholtz, New York-based executive vice president of M&A diligence and portfolio solutions, and co-head of property / casualty at CAC Specialty, a subsidiary of Cobbs Allen. [19659002] "If someone is looking at a company that is new, they are opportunistic, where perhaps the seated carrier indiscriminately raised prices for everyone," he said. market, buyers can get significant savings compared to newer innovations, said Eichenholtz.

"If you can give a carrier a good reason to get where you think they would be, they will definitely provide a program that is better than what the general market has done, "he said.

New entrants are adding capacity to the market, but not underperforming the market," said Eichenholtz. "It's different that this is going around," he said.

The municipality's liability losses have not exceeded its self-insured balance of USD 750,000 for several years, he said.

"For 2022, I plan for to really re-evaluate the program, ”said Mr. Duckworth, who joined Garland's management at the end of 2020.

"I plan to enter the market with a wealth of data and say, 'Hey, we are not only a good risk, but we are a class. A risk that you would like. & # 39; "

Excess stock

Increases in excess liability interest are also dampened.

" 2021 was a little bit kinder, gentler years for the insured and interest rate brokers, says Baltimore-based Diana Cosse tti, senior vice president and chief underwriting officer speciallines, excess and rail in Liberty Mutual's global risk solution division.

In 2020, the average surplus increased by more than 25%, but by 2021 the share of lead umbrella increased by 10% to 20% and higher inventories increased by 25% to 30%. In 2022, umbrella interest rates are likely to stabilize and increase by 10% to 15%, and higher interest rates will rise by 5% to 10%, Cossetti said.

At tougher risks, established insurance companies are still reducing the capacity they provide but a significant amount of new capacity entering the market, Cossetti said.

Average prices rose in "low teens" at renewals at the end of the year, but some buyers, such as those who have seen large increases in recent years and marketed their programs, got cuts, said Jesse Paulson , New York-based accident manager for Marsh LLC.

The limits are still limited compared to available limits before the market hardened, when $ 25 million lead umbrella limits were common, brokers and insurers say.

But insurance companies are willing in some cases to offer larger limits, for example when trying to write both the primary and the excess lead layer, Paulson said.

"Where a "Lenders have a good comfort level with the risk associated with a given customer and are very interested in writing the primary line, they can raise the umbrella limit well over $ 10 million or $ 15 million," he said.

The total market capacity of most buyers with large surpluses is between $ 700 million and $ 800 million, but it is still possible to buy towers for $ 1 billion, Paulson said.

Over the past three years, several large insurance companies have reduced their operations with additional responsibilities, including American International Group Inc. and Swiss Re Corporate Solutions, but the market has largely stabilized with new and existing insurance companies competing more for business, say brokers and insurance companies

Axa XL worked to transform its portfolio of excess debt in 2019 and 2020, but 2021 marked a return to more general portfolio management, said Donnacha Smyth, Bermuda-based chief underwriting officer, Excess Victims of America at Ax XL. [19659002] "We continue to be in a capacity-limited surplus market," he said. "We saw the figures for excess accidents peaking in the third quarter of 2020, and although the figure has remained strong, it has been a steady decline month by month." , which is significantly lower than the interest rate increases a year earlier, he said.

Coverage changes

Underwriters have limited coverage of so-called perpetual chemicals, such as PFAS, which are used in certain household items and industrial processes. They have also limited coverage for accounts of sexual harassment in the face of large-scale settlements paid by young people and religious organizations in recent years. the exposures, say market participants.

But they ease restrictions on communicable diseases and remove or change exclusions introduced at the beginning of the pandemic because significant losses related to third party liability have largely not occurred.

“It will litigation, it just has not turned out to be something so systematic in nature, "said Paulson of Marsh.


Source link