Commercial Insurance Price Increases Stay Level But Clients Still Worried: CIAB

“Stabilization” and “moderation” continued to be the operative words for premium increases in the commercial property/casualty market, but many clients remain concerned about future hikes, according to the newest survey from The Council of Insurance Agents & Brokers.

Overall, premiums in the fourth quarter 2022 went up for the 21st consecutive quarter – up 8% across all account sizes, compared with up 8.1% in the third quarter 2022.

Though premiums are not increasing at the levels they were the previous two years, CIAB reported the top client concerns according to respondents of its Q4 Commercial Property/Casualty Market Index were “future premium increase” and “higher current premium.”

This may be the reason, said CIAB, that “enhancing customer experience” was stated as a priority for more agents and brokers that took part in the survey since these intermediaries are usually the bearer of news to clients regarding premium hikes. For Q4, 45% of respondents stated it as a priority, when “enhancing customer experience” typically falls in the 20-25% range as a priority.

“We have the opportunity to educate our clients on what is happening in the marketplace and to prepare them for the ever-changing coverage and premium implications of this ‘interesting’ insurance market,” CIAB highlighted as a quote from one respondent.

Helping clients navigate the market may also be the reason “recruiting and retaining top talent” was a top priority of agents and brokers, especially as retirements outnumber new, younger professionals entering the industry. It was also listed as a top challenge. Comments from respondents point to the difficulties in training within a hybrid work environment, and finding the right skills or cultural fit.

“Making time to develop succession candidates needs to become a core competency for our success,” noted one broker respondent.

Returning to premium pricing, even increases in cyber and umbrella were not as high as previous quarters, according to survey results. Umbrella increases dipped below 10% for the first time in 3 years and while cyber continued with Q4 premium increases of 15%, increases in the line the previous three quarters were 20%, 26.8%, and 27.5%.

The highest premium increase in Q4 belonged to commercial property. Premiums were up an average of 16%, with 73% of respondents reporting that inflation was affecting the line. Carriers focused more on valuations in Q4, as underwriters were required higher deductibles and tighter terms and conditions.

Topics Trends Commercial Lines Business Insurance Pricing Trends