Hard commercial market begins to moderate; expanded capacity could bring stability in 2022

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[{"type":"text","content":"Insurer pursuit of market share suggests confidence in rate adequacy and stronger returns on capital, Willis Towers Watson’s latest Insurance Marketplace Realities predicts\nARLINGTON, Va., Nov. 16, 2021 (GLOBE NEWSWIRE) -- North American commercial insurance prices are expected to soften gradually, bringing a welcome deceleration in premium rate increases and further stability in 2022, according to Willis Towers Watson’s (NASDAQ: WLTW) 2022 Insurance Marketplace Realities report. After several annual cycles with steep, often relentless increases, the marketplace has taken significant steps toward “correcting” itself, said Willis Towers Watson, a leading global advisory, broking and solutions company. The report, published today, points to the forces that led to the hard market, including systemic rises in risk from heightened catastrophe losses likely driven by climate change, “social inflation” and rising exposures in areas ranging from cyber to liability, which have not gone away. While Willis Towers Watson predicts market moderation, cyber liability and fiduciary liability insurance are two exceptions to the general trend. Rates within these lines have been going up steeply, and in the case of cyber, the increases the report is forecasting for 2022 are even steeper. “For the most part, we are moving toward stability as we watch the workings of a simple economic law — supply and demand,” said Jon Drummond, senior editor, Insurance Marketplace Realities and head of Broking, North America at Willis Towers Watson. “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.” The report points out that the risk manager’s job of distinguishing his or her organization’s risks in the marketplace is more demanding than ever. More data and better data are required and expected, and the information must be presented in a way that is clear and compelling. Fortunately for insurance buyers, the tools to help analyze and present that data are getting better, too. Another aspect of the new insurance marketplace has been brought on by COVID-19. “We’ve discovered we can do our work remotely, most of it anyway, and that the vi...

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