According to The Council’s Commercial Property/Casualty Market Index, premium prices continued to rise in Q3 2021. Prices increased for the 16th consecutive quarter across all account sizes, at 8.9 percent, slightly higher than the 8.3 percent average increase recorded in Q2 2021. When the data was segmented by account size, large accounts had the highest increase of all account sizes, at 10.4 percent, while small accounts had the lowest increase, at 6.2 percent.
Cyber premiums increased by 27.6 percent in the third quarter of 2021, setting a new high. Respondents agreed that the rise in cyberattacks, specifically ransomware, phishing, and social engineering attacks, was one of the primary drivers behind these increases. They also mentioned that Cyber had previously been underpriced due to a lack of historical data and competition incentivizing carriers to keep prices low, so the line has been undergoing an adjustment period in terms of premium pricing.
“Carriers continued to take a hard line on cyber risks in Q3 2021,” said Ken A. Crerar, President/CEO of The Council. “Brokers and clients that take proactive action on cybersecurity risk by implementing stricter loss controls, such as requiring multi-factor identification for access to company systems and employee training, will be at a distinct advantage when it comes to finding robust, affordable cyber coverage.”
Respondents also saw an increase in claims for lines such as Commercial Property, Commercial Auto, and Workers’ Compensation as employers began to reintroduce employees into the workplace. “Claims are still below pre-pandemic levels, but increasing as more people get back on the road and back to work,” one respondent from a large Southwestern firm explained. “Courts began to open, people began to drive, and severe weather events increased,” another respondent from a large Northeastern firm said.
When asked how they would drive organic growth and recruit and develop talent, brokers again emphasized the importance of leveraging technology. “New technology platforms are creating opportunities for commercial insurance brokers to serve clients in real-time without interruption, to provide consulting services based on data rather than guesswork, and to respond to client service needs promptly and accurately,” said one respondent from a large Northeastern firm. In terms of recruiting and developing talent, one respondent from a large Northwestern firm stated, “We need to be creative, hire people from other locales who can work remotely.” Another respondent from a large Midwestern firm stated, “The ease for employees to change employers in working virtual can be either a problem or an opportunity for brokers.”