• Carriers are staying disciplined and continuing to push rate increases, especially toward businesses with challenging risk profiles. Rate increases are not as prevalent industrywide but rather more concentrated on an account-by-account basis, with an average price increase (rate plus exposure) of 8% across all lines, according to Gallagher U.S. client data.


WHERE WE’RE GOING • If inflation continues unabated, it will push up loss costs and ultimately will have to be passed through premium increases.


• In response to inflationary pressures, the Federal Reserve has increased short-term interest rates, which support stronger investment returns for carriers. Questions linger about how high interest rates will go.


• Tird-party litigation funding remains a concern for insurance carriers because it encourages prolonged litigation and larger monetary awards. It also is a growing contributor to social inflation because of its tendency to drive higher claims costs. Litigation funded by third-party investors is most prevalent in commercial auto, general liability, directors and officers, and umbrella/excess insurance lines.


• How will carriers’ continued investments in data and technology enable them to anticipate and react to changing risk trends in real time? If carriers are able to understand changing risk trends promptly, they can be more responsive in adjusting premiums.


• Te uptick in new competition could moderate rate increases, likely further into 2023.


• Community banks remain in a highly attractive niche.


Although market conditions have begun to stabilize, this remains a somewhat challenging marketplace overall. Rates should continue to moderate in many lines throughout 2022, except for cyber and workers’ compensation insurance, which remain the most challenging lines.


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