North American commercial insurance prices should soften gradually in the coming months, bringing a slowdown in many premium rate hikes and more stability in 2022, Willis Towers Watson said in a new report. Cyber is a different story, however.

“For the most part, we are moving toward stability as we watch the workings of a simple economic law — supply and demand,” Jon Drummond, senior editor, Insurance Marketplace Realities and head of Broking, North America at Willis Towers Watson, said in prepared remarks. “That does not mean, however, that this is a simple marketplace. The two-tiered marketplace we highlighted in our last issue remains a reality in many lines of business; conditions are better for better risks and tougher — sometimes quite a bit tougher — for less attractive risks.”

While Willis Towers Watson predicts market moderation in general, cyber liability and fiduciary liability insurance are two exceptions to the trend. Rates within these lines have been going up steeply, and in the case of cyber, the increases the insurer is forecasting for 2022 are even steeper.

Cyber has expected rate hikes ranging from 50 percent to 150 percent.

Commercial property cover for non-challenged occupancies should go up between 2 percent and 10 percent in 2022, but challenged occupancies should see hikes of 15 percent or more, Willis Towers Watson said. Domestic casualty has a range of predictions, with single to double-digit price hikes expected for general liability and auto. Low to mid-double digit price hikes are likely for umbrella (high hazard) and excess (high hazard). International should be flat, and workers compensation should range from a 2 percent decrease to 4 percent increase, according to the report.

For executive risks, Willis Towers Watson expects directors and officers public company (primary) to see flat to 25 percent rate hikes. D&O for private/non-profit (overall) should go up anywhere from 5 percent to 40 percent. E&O for large law firms should see rate hikes go up between 5 percent and 10 percent. Employment practices liability (primary) should jump 10 percent to 30 percent, and fiduciary (financial institutions) should climb 15 percent to 50 percent.

Terrorism and political violence rates should either be flat to 20 percent higher next year.

For more, read Willis Towers Watson’s “2022 Insurance Marketplace Realities” report.

Source: Willis Towers Watson