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Survey Report

Insurance Marketplace Realities 2021 Spring Update – Personal lines

Personal Lines

April 21, 2021

Insurance carriers are taking aggressive actions in a drive toward profitability. Buyers need to be creative in finding solutions.
Rate predictions
  Trend Range
Most risks:
Homes under $1,000,000: Increase (purple triangle pointing up) +5% to +7%
Homes over $1,000,000: Increase (purple triangle pointing up) +7 to +9%
Cat-exposed: Increase (purple triangle pointing up) +20% to +50% with contract limitations or non-renewal
Cat-exposed with losses: Increase (purple triangle pointing up) +50% to +100% or non-renewal

Key takeaway

After a year that included a record number of named storms and five of the six largest California wildfires ever recorded, 2021 started off with the costliest winter event in Texas history, all highlighting little relief for insurance carriers and pointing to added pressure on insurers to seek aggressive rate hikes and contract limitations.

Spotlight on COVID-19

  • Many cities saw an exodus as residents flocked to second homes in more rural or exurban places.
  • Wherever they landed during the pandemic, many invested in their work-from-home accommodations and should be vigilant on updating property values and informing their insurers of any re-modeling or construction.

Property rates will continue to rise as climate change impacts the frequency and severity of storms.

  • Insurers are seeking additional premium wherever possible and applying stricter underwriting, particularly to property valuations and mandatory installation of loss mitigation measures.
  • Home insurers will continue to accelerate rate to match their risk and cover higher reinsurance costs.
  • California insurers dropped a staggering 31% of residential policies statewide in 2020, pushing buyers into alternatives such as the FAIR Plan, the state’s bare-bones fire insurance plan of last resort, where enrollment jumped by 225%.

Auto rates have seen modest improvement while driving behavior has worsened.

  • Even though fewer people are driving during the pandemic, riskier driving has surged, leading to an increase in fatal crashes.
  • Recent lawsuits regarding pandemic-related rebates in response to the drastic fall in miles driven suggest that insurers may be required to give back even more premiums to customers.

Liability concerns mount as large verdicts are becoming commonplace due in part to social inflation.

  • An increase in litigation activity has led insurance carriers to reduce capacity and raise pricing to reestablish profitability.
  • High-profile families/individuals are being scrutinized by underwriters looking to limit their exposure to anyone who attracts media attention.

Family offices evolve to protect household members and investments.

  • Single family offices continue to collaborate and join other families to establish efficient multifamily office structures.
  • The combination of investment management, financial planning, estate and trust administration, legal work, tax/accounting and philanthropic administration has created additional coverage needs for D&O, E&O, EPLI, fiduciary liability, cyber liability and crime.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.

Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.


Tyler Banks
National Practice Leader and CEO, Personal Lines

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