Looking Ahead to 2022: A Guide to Property and Casualty Risk Management and Insurance

Mar, 24 2022

Property Coverage

Looking Ahead to 2022: A Guide to Property and Casualty Risk Management and Insurance

Last year COVID-19 brought enormous uncertainty to the insurance market, whereas the pandemic appears to be showing a declining trend decline this year. Here's a brief overview of how much the insurance industry forecasts the premium rates will be in 2022, particularly for property and casualty risk management and insurance.

Commercial Lines Coverage Forecast for 2022

In the coming year, the commercial lines market, which reflects business insurance, is expected to favor insurance buyers.

Projection 2022: Optimism, with Certain Pockets showing Upward Trends

Although the insurance industry may be optimistic about rate increases continuing, P&C insurance rates are expected to flatten sometime in 2022.

Property Insurance Rates: A Watchful but Optimistic Market

While insurance rates for commercial property on average increased by 8 percent in 2021, risks have been increasing as well. However, since risk management for clients is improving, the overall forecast for commercial property rates favors buyers.

Casualty and Workers’ Comp Renewal Strategy for 2022

Different types of insurance may see rate hikes in 2022. Be aware that auto, general, and umbrella liability insurance costs have been rising due to increasing claims. On the other hand, workers' compensation and high excess casualty insurance have become stabilized markets.

Workers' Compensation

The rates for workers' compensation haven't moved much in the last year, despite the pandemic. According to the Council of Insurance Agents and Brokers, rates increased by less than a half percent in 2021. Workers' comp rates are expected to stay within a half percentage point up or down.

Rate Forecast for 2022

In 2022 insurance rates are expected to stabilize after a period of increases. Rates may even fall lower due to the entrance of new market competition.

Commercial Auto

Even though auto insurance claims were down by over 25 percent in 2020, average payouts jumped over 3.8% after a decline of 4.6% in 2020. Insurance companies are concerned that claims will spike once people get back to daily commutes.

Commercial General Liability

Rates for commercial general liability insurance have been on the rise due to an uptick in litigation activity. Insurance rate increments were up 15 percent in the 3rd quarter of 2021, particularly for high-risk industries such as on-demand delivery services and fire fighting.

Umbrella and Excess Liability

Insurers expect higher liability losses due to social inflation as claims related to social factors increase. Litigation financing increased by 18 percent in 2020, surpassing $11 billion. Settlements of $15 million or more have steadily grown in recent years.

Workers' Compensation- Best Practices

The top cause of on-the-job fatalities continues to involve car accidents. However, the introduction of telematics technology, which tracks driver behavior, could be a factor in reducing accidents. Buyers can lower auto insurance rates by conducting safety meetings with an emphasis on defensive driving techniques.

Insurance Rates Continue to Remain Near Historic Lows

Interest rates, which may rise slightly in the coming year, are still expected to remain near historic lows. Insurance underwriters are able to capitalize on low-interest rates, but if rates increase, policyholders will likely pay higher premiums.

What Should Middle Market Underwriters Expect in 2022?

Middle market underwriters expect premium hikes in 2022 for auto insurance and workers' comp. However, they expect general liability premiums to be flat or slightly lower while coverage potentially expands.

Customers should still take proactive measures to control possible losses regardless of whether insurance rates go up or down. Contact us at GrayStone Insurance Group for more information on property and casualty risk management insurance.