US Commercial Insurance Industry Continues to Witness Price Hike in 2023

Highlights:

• Premiums climbed by 5.7 percent across the five main business lines.
• Worker’s compensation is one of the few coverage areas that have not had significant growth in recent years.
• Rates are affected by several variables, and they change depending on a business’s location and the sector.

In May 2022, almost all commercial insurance rates climbed up significantly. The only exception to this is the rates of workers’ compensation insurance.

According to the data from CIAB, U.S. commercial insurance premiums rose for the 18th consecutive quarter in Q1 2022. In Q1 2022, premiums climbed by 5.7 percent across the five main business lines (commercial property, commercial auto, umbrella, general liability, and workers compensation).

Business owners’ policy prices increased by 5.67%, general liability rates increased by 4.85%, and commercial property rates increased by 6.49% in April. Umbrella insurance also experienced quite the hike and went up by 10.5 percent. Professional liability experienced a double-digit rate increase after nine quarters of acceleration, though having a lower rate of growth than the prior quarter. Workers’ compensation rates decreased by 0.84 percent. Worker’s compensation is one of the few coverage areas that have not had significant growth in recent years.

Among all these commercial insurance rates, cyber liability is the sector where prices have soared the most. Most other lines had increased below 10%, but cyber liability rates increased by an average of 27.5 percent. “Respondents said that the rising frequency and severity of cyber claims were among the leading causes of the ongoing price rises. A significant factor in the tension was the mix of low carrier appetite for the risk and strong demand, according to the CIAB.

The issues causing these rate rises don’t seem to be going away. Rates are affected by several variables, and they change depending on a business’s location and the sector in which it operates. The majority of lines of coverage will see average rate increases of between 5 and 10 percent, according to insurance experts. It’s a good idea to start looking around before your policies are due for renewal.

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Sources

CIAB