| Trend | Range | |
|---|---|---|
| Favorable risks | ||
Property |
 |
+5% to +10% |
General liability |
 |
Flat to +5% |
Auto |
|
+5% to +10% |
Workers compensation |
|
Flat to +5% |
Umbrella |
|
+5% to +10% |
Excess |
|
+5% to +10% |
| Challenging risks | ||
Property |
|
+10% to +15% |
General liability |
|
+10% to +15% |
Auto |
|
+15% to +25% |
Workers compensation |
|
+5% to +10% |
Umbrella |
|
+15% to +25% |
Excess |
|
+15% to +25% |
Key takeaway
The middle market segment is starting to stabilize as many clients have already faced market corrections in recent cycles. Expect to see a deceleration of rate increases and program structure changes for favorable risks. However, challenging conditions remain for adverse risks, which continue to experience rate increases; though, even for these buyers, increases are less steep.
Marketplace overview
- Market corrections on rate, program structure and capacity have impacted most buyers.
- Insureds with notable losses and heavy cat exposures and those in certain industry segments continue to be considered difficult risks. As before, tougher classes of business include habitational, transportation, healthcare, social services, hospitality, food and foundries.
- Carriers have aggressive new business and retention goals, which are resulting in competitive outcomes on favorable business.
- Despite the stabilization, carriers continue to carefully manage capacity, increase rates and issue non-renewals on challenging accounts.
Property
- Property limits, including business interruption, are being closely examined by underwriters to ensure proper valuation.
- Contingent business income coverage continues to see tighter underwriting guidelines and reduced limits.
- Cat exposures (coastal, earthquake, flood, wildfires, wind) are harder to place. Capacity is being reduced and deductibles increased.
- Convective storm deductibles are being added in states that previously did not have them — or these deductibles are being increased.
- Additional exclusions for civil commotion and riots are being seen on some hospitality, public entity, retail and real estate accounts.
- Water damage coverage is seeing higher deductibles and lower sub-limits, and water damage mitigation is a focus.
- Underwriters are focusing on accurate construction occupancy protection exposure (COPE) information, including age of roof.
- Tougher property risks once written on a 100% single-carrier basis are being pushed to shared/layered programs.
- Loss control visits are more frequently required prior to quoting.
- Affirmative cyber peril and communicable disease exclusions are being applied on property policies.
- Given the recent increase in vacant properties, carriers are focused on what protections are in place and close attention should be paid to vacancy clauses in policies.
General liability
- Carriers are showing heightened concern about human trafficking exposures for hospitality and real estate accounts.
- Sexual abuse and molestation coverage continues to see capacity reduction and scrutinized underwriting.
- Most markets are no longer considering uncapped per-location aggregates.
- Communicable disease exclusions are still being included.
- PFAS (per- and polyfluoroalkyl substances) exclusions are starting to appear.
Automobile
- Mono-line auto risks are extremely challenging to place and should always be leveraged with other lines of business.
- Livery and ride-share exposures have become mandatory exclusions.
- Hired and non-owned auto continues to be heavily underwritten, and buyers with higher exposure are not finding market interest.
Workers compensation
- Infectious disease-related exposures are closely underwritten.
- Remote working has created questions surrounding accurate payroll reporting, especially in monopolistic states, as coverage needs to be purchased through the state pools.
- More underwriting scrutiny is being placed on accounts with exposures in tougher jurisdictions.
Umbrella and excess liability
- Higher attachment points are being required by lead markets on both general liability and auto policies for most risks.
- For tougher risks, buffer layers are increasingly being explored.
- Markets have begun to deploy more capacity on both leads and excess.
- Capacity for lead umbrellas has stabilized, and reductions in limits are less common.
- Supported leads are more competitive, as carriers leverage primary lines with their umbrella capacity.
- Risk purchasing groups are still an option, but underwriting guidelines are being tightened, and additional time is required for underwriting. Capacity is being reduced and insurers/reinsurers are changing frequently.
- Clients continue to review contractual requirements and limits purchased.
- Carriers are less willing to provide certain coverages, such as professional and sexual abuse/molestation.
- Minimum premiums have increased significantly, driving pricing higher for excess layers.
COVID-19
- Removal of communicable disease exclusions can be negotiated if proper COVID protocols are in place.
- Carriers have begun to offer carve-backs to the communicable disease exclusion, providing coverage for non-pandemic-related communicable diseases.
- Clients continue to navigate regulatory issues surrounding vaccine and mask requirements.
- Carriers remain concerned with workers compensation exposures in states with presumptive rules.
- As workers return to worksites, scrutiny is focused on increased exposures and the potential for increased loss activity.
