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Press Release

Markets begin to stabilize for commercial insurance rates, yet cyber remains a challenge

Aerospace|Casualty|Credit, Political Risk and Terrorism|Cyber Risk Management|Medioambiental|Financial, Executive and Professional Risks (FINEX)|Marine|Property|Workers Compensation
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April 7, 2022

ARLINGTON, VA, April 7, 2022 — Amid a steady deceleration of rate increases, 2022 is starting to demonstrate a shift toward normalcy for the commercial insurance market. Buyers are still seeing rate increases; however, many of those increases are now dropping to single digits and even flat renewals, according to the 2022 Marketplace Realities Report, Spring Update by WTW (Willis Towers Watson, NASDAQ: WTW), a leading global advisory, broking and solutions company.

While the market is appearing to stabilize for commercial rates, we are nowhere near a soft market, WTW business leaders say. Leaders in 79% of WTW’s commercial business lines forecast continued rate increases, however these are slowing significantly.

The standout across the industry is the cyber market, where buyers are seeing higher increases than just a few months ago. Rate increases as high as 100% to 200% are commonplace in the cyberinsurance market today, making cyber a very difficult market for commercial buyers to navigate. Factors including overall claims activity, evolving regulations and an ever-growing complicated risk environment are collectively providing headwinds to slowing cyber rate increases.

In an increasingly challenging global environment with military conflict in Europe, continued supply chain backlogs, accelerating inflation and a more expensive borrowing landscape with the Federal Reserve’s recent rate increase, markets will likely see uncertainty and volatility.

While we continue to see rate increases across most lines of business, the silver lining is that the increases are decelerating and beginning to stabilize.”

Jon Drummond | Senior Editor, Insurance Marketplace Realities, Head of Broking, North America, WTW

Jon Drummond, senior editor, Insurance Marketplace Realities, and head of Broking North America, said, “While we continue to see rate increases across most lines of business, the silver lining is that the increases are decelerating and beginning to stabilize.”

A confluence of factors is suggesting that higher interest rates and rising inflation won’t be transitory and instead will be a part of our economic environment for awhile. Commercial buyers that are proactive with their risk planning strategy will be best positioned to absorb the increases, rising interest rates and record-breaking inflation.

Key price predictions for 2022

Insurance Rate Predictions
Property
Non-challenged occupancies Flat to 10%
Challenged occupancies +15% or more
Domestic casualty
General liability +4% to +10%
Umbrella (high hazard) <+20%
Excess (high hazard) <+15%
Workers compensation –2% to +4%
Auto +5% to +12.5%
International Flat
Executive risks
Directors’ and officers’ public company (primary) Flat to +20%
Directors’ and officers’ private/not-for-profit (overall) +5% to +20%
Errors and omissions (large law firms) +5% to +10%
Employment practices liability (primary) +5% to +15%
Fiduciary (financial institutions) +10% to +25%
Cyber
+100% to +200%
Political risk
Most risks Flat to +20%
Terrorism and political violence
Terrorism and sabotage +5% to +10%
Political violence +10% to +20%

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.

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