According to the latest report from the Council of Insurance Agents and Brokers (CIAB), the third quarter of 2022 marked the 20th consecutive quarter of increased commercial property/accident premiums.
The average premium increase across all account sizes was 8.1% in Q3 2022, compared to 7.1% in the second quarter.
Premium prices continued to moderate across most industries. Across all lines, the average premium increase in the third quarter was 7%.
Cyber insurance saw premiums rise 20.3% in Q3 2022 compared to 26.8% in the previous quarter and a record high of 34.3% in Q4 2021. CIAB said demand for cyber coverage remained high, with 78% of the respondents who reported seeing an increase. One respondent said there was some stabilization in cyber rates “while all controls were in place”. Others pointed to some challenges as carriers have added sub-limits to certain coverages, such as ransomware and extortion, and retentions are on the rise.
Commercial real estate saw premiums rise an average of 11.2% in the third quarter compared to 8.3% in the second quarter, due to inflation and natural disasters. The vast majority (95%) of brokers agreed that inflation affected market trends in the third quarter, especially in commercial real estate. Inflation drove up construction costs, leading to higher property valuations, CIAB said.
More than half of respondents reported an increase in commercial property claims in the third quarter, possibly caused by disasters. Flooding was higher in the third quarter, with 31% of respondents reporting an increase. One respondent said catastrophe ownership saw “significant rate increases and capacity restrictions,” while another reported large increases in deductibles.
Commercial car premiums increased 7.6% in the third quarter compared to 7.2% in the second quarter. This was the 45th consecutive quarter of rate increases, largely due to an increase in repair and replacement costs. Fifty percent of brokerage respondents also said claims increased in the third quarter.
Employee compensation was the only line to see a decline in the third quarter of 2022, with premiums at -0.7% compared to -1.2% in the second quarter.
Trends Commercial Lines Price Trends Property Accidents
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