Q1 2023 was the 22nd consecutive quarter of premium increases, at 8.8%. Large accounts saw the highest increase, at 11.4%.
Most lines of business experienced premium increases comparable to or slightly lower than the previous quarter. Workers compensation premiums fell further this quarter, at an average of -0.5%.
Cyber premium pricing saw further relief this quarter, with respondents reporting an average increase of 8.4%, a stark contrast to the quarterly increases of more than 20% just a year ago. Almost a third of respondents also reported an increase in underwriting capacity for the line, suggesting carrier attitudes towards underwriting the line may have started to shift. Industry efforts to promote a more aggressive cyber risk management strategy for insureds may have also contributed by reducing, or at least mitigating, cyber claim losses.
Commercial property remained the outlier this quarter. The average increase in commercial property premiums spiked to 20.4%, which is the first time since 2001 that this line recorded an increase higher than 20%. Eighty-five percent of respondents also reported that capacity decreased further for the line. Inflation and natural catastrophes were noted as the primary drivers for commercial property’s continued troubles.
Respondents reported that clients remained deeply concerned about high premiums and the potential for future increases. Approximately 80% of respondents said two of the top three concerns their clients had in Q1 2023 were “high current premium” and “future premium increases.” Fifty-six (56%) of respondents also identified “limitations on coverage” as a top-three client concern.
Besides “recruiting and developing talent” and “driving organic growth,” a top broker priority and challenge in Q1 2023 was “becoming more data driven.” For brokers, making better use of data will help them with identifying new market opportunities and enhance their customer experience by giving them the information to craft custom programs, help customers in the application experience and provide decision support for clients.
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For questions or further market insights, contact MJ Insurance today.
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