Commercial Rates in 2024 — USI Says Rates Will Go Up but Not as Much as 2023

USI Insurance Services has put out its forecast for 2024. The 2024 Commercial Property and Casualty Market Outlook says we can expect prices to rise but not at the same pace we saw in 2023.

Here’s the forecast:

  • 5% to 15% rate increases for non-catastrophe property with minimal loss history and good risk quality
  • 15% to 30%+ for CAT-exposed property with minimal loss history and good risk quality
  • 15% to 30%+ rate increases for those risks with poor loss history or poor risk quality

“We expect the majority of renewals to finish with less than a 20% rate increase, but insureds that fall into one of the categories above could experience a higher result as outlined,” the report said.

In 2023 CAT property with minimal loss history and good risk quality rose between 25% and 150%. CAT or non-CAT properties with poor loss history and poor risk quality saw jumps of about the same percentages.

USI says as the property insurance market finds ways to adjust to rising CAT losses, insurer appetites that are changing and capacity changes, there will be other — important — changes:

  • As inflation slows, there will be less volatility in replacement costs
  • The surplus market will grow
  • Alternative risk transfer will see increased interest
  • Technology and artificial intelligence will have greater impact on underwriting decisions
  • Updated CAT models will also impact some segments of the market

Overall, USI says we will see flat to 5% rate hikes in general liability and product liability markets. As for the auto market, significant rate increases will likely be the norm for awhile.

Umbrella/Excess will see hikes of between 5% and 15%. Work comp will remain competitive but we’ll see more rate drops than hikes.

The cyber market will remain volatile, and while that’s the case, rates will remain rather stable with increases of flat to 15%.

D&O rates will be flat to down 7.5% through the first half of 2024. No prediction by USI for the second half.

Source link: Insurance Journal —

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