CIAB’s Q1 2023 P/C Market Survey Shows Signs of Stablization in Cyber And A Spike In Commercial Property Premiums
Premium pricing increases moderated for most lines in Q1 2023 determined The Council of Insurance Agents & Brokers in its latest Quarterly P/C Market Survey. After reviewing the latest data from January 1 through March 1 of 2023, the CIAB Survey found that premiums overall continued to rise for the 22nd consecutive quarter. The average increase across all account sizes was 8.8%, slightly higher than the 8.0% recorded in the previous quarter.
Premium pricing began to settle for Cyber, some signs of more underwriting capacity
Cyber line of business showed the most significant sign of relief this quarter with premiums increasing by an average of only 8.4%, compared to 15.0% in the last quarter and more than 20% a year ago. A possible reason for this trend is the decrease in cyber claims reported by respondents since Q1-2022, an indication that carriers have reduced premium increases due to lower losses. The lower losses could also reflect the industry efforts to promote a more proactive cyber risk management strategy for insureds.
“Property as a whole experienced the quickest hardening market anyone can remember in a lifetime.”
In contrast, commercial property premiums surged by 20.4% in Q1-2023, marking the first time since 2001 that this line has experienced an increase of over 20%. 61% of survey respondents believed commercial property claims increased more than any other line during this Quarter. Moreover, respondents saw this line as the most affected by inflation, mainly due to the rising cost of repairs. Additionally, recent natural disasters like Hurricane Ian, as well as supply chain disruptions with replacement materials, all contributed to increasing lost costs which, in turn, pushed up premiums.
Property loss trends also led to underwriting changes for the property line. Carriers significantly reduced capacity, with 85% of respondents reporting a decrease in underwriting capacity for commercial property. Respondents also mentioned “significant terms and conditions changes, larger deductibles, more significant exclusions, and reduced coverage.”
Brokers focus on using data; recruiting and developing talent still a struggle
Apart from the usual top two broker priorities and challenges – “driving organic growth” and “recruiting and developing talent” – broker attention was also focused on “becoming more data-driven” with 34% of respondents highlighting this as a top priority for their firm.
“We need better access to our own data and strategy for how we’ll use it,” explained one respondent from a large Midwestern firm in the survey. Other respondents
also acknowledged this need, with some describing needing to “centralize” their data, as well as “data aggregation and easy accessibility for broader groups.”
How to view the survey
A complete copy of the CIAB’s quarterly survey can be downloaded via the CIAB website.
