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Global Insurance Market Index

US Pricing Q4 2021

Insurance pricing in the fourth quarter of 2021 in the US increased 14%, year-over-year, the same rate of increase as the prior quarter.
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US Pricing: Cyber Claims Put Pressure on Financial and Professional Lines

Insurance pricing in the fourth quarter of 2021 in the US increased 14%, year-over-year, the same rate of increase as the prior quarter.

Constant bar chart represents Global Insurance Composite Pricing Change.

Property insurance pricing rose 7%, compared to 10% in the third quarter.

  • Clients with poor risk quality, meaningful losses, or significant exposure to secondary catastrophe (CAT) perils — including wildfire, convective storm, and pluvial flood — generally experienced above average rate increases.
  • Clients with no losses, good risk quality, and in sought-after industries were able to access surplus capacity, which helped to mitigate pricing increases and deterioration of policy terms.
  • Underwriters scrutinized contingent time element coverage, especially for unnamed suppliers, following a number of large per-risk losses.
  • Insurers continued to push for tighter terms and conditions, including deductibles, non-physical damage cyber, and communicable disease exclusions.

Casualty insurance pricing in the US increased 4%, down from 7% in the third quarter. Excluding workers’ compensation the increase was 7%.

  • Auto liability pricing overall rose 4%; organizations with larger fleets generally increased by 8%, smaller ones by 2%.
  • Primary limits again increased as lead umbrella insurers sought higher attachment points.
  • General liability pricing continued to be affected by jury verdicts and social inflation.
  • The pace of increase in excess liability pricing generally slowed compared to earlier quarters, helped in part by increased competition.

Financial and professional lines pricing increased 34%, which was higher than the 27% rise in the third quarter.

  • Directors and officers (D&O) liability insurance pricing for publicly traded companies increased 6%, lower than the 10% increase observed in the prior quarter.
    • New capacity increased competition in the mid-to-high excess layers, and many clients increased their D&O limits.
  • There was less capacity available for fiduciary coverage for larger plans, and insurers continued to increase minimum retentions and implement tighter risk management requirements.
  • Cyber pricing increased 130%, affected largely by the continued increase in the frequency and severity of ransomware claims.
    • Business interruption and data exfiltration contributed to the increasing total claim pay-outs from ransomware events.
    • Cyber underwriting continued to focus on a company’s control environment and demonstrated cybersecurity maturity.
  • Financial institutions (FI) coverage pricing increased 31%.
  • Errors and omissions (E&O) insurance pricing increased 86%. Excluding cyber, E&O increased 22%.