Liability insurance rates could slow in H1 ’24 amid capacity
General and product liability insurance rates may calm in the first half of 2024 amid increased competition that could also ease limits in umbrella and excess liability, analysts at insurance broker group USI Insurance Services have said.
“We anticipate a slightly more competitive rate environment in 2024 with an expanding number of insureds experiencing flat rates to 5% increases as the year progresses,” USI analysts said of general and product liability, with exception for industries and segments broadly considered higher risk.
USI attributes much of the rate stability, a break from the 10-15% gains seen in 2023, to the level of rate adequacy already gained alongside steps by insureds to assume more of their risk themselves via higher deductibles or self-insured retentions.
Umbrella & excess liability will add rate in a broader range from flat to up 15% on a market that might be more characterised by their ability to get higher limits on programmes, often requiring less layering of excess programmes.
“Markets will be more willing to negotiate on price,” USI said of umbrella & excess liability accounts. “This trend will further foster rate stabilisation for both middle-market and larger accounts.”
Middle-market insureds with up to $50 million in limit might get out with 5% or less in rate increase. “Larger insureds will continue to experience more rate volatility.” Awareness of possible rate fatigue will push carriers to package lines, creating opportunities in umbrella pricing.
Except pubic company D&O liability flat to down 10% and for insurers to “likely push for premium stabilisation.” Rising federal securities class actions, inflation and an “unsteady economy” may support insurer hopes, analysts said. Expect private company D&O within 5% of H2 2023 levels on a market USI calls “stable and competitive.” Expect rates in employment practices flat to up 10%.
Across casualty, social and economic may still hit a swathe of insureds with imperfect loss history and operating in industries seen as inherently hazardous, USI said.
Elsewhere, primary auto liability on fleets of up to 200 cars with a good loss history may hold rate gain to 5%, but troubles on loss history could push that up into a 20-30% range. Put excess auto buffers up 40% or more. That largely matches the pace on rates seen in 2023.
Environmental combined general liability pollution rates in H1 will land within 5% plus or minus of last reading. Excess layers could be up 5 to 15%. It's a young market and USI’s primary forecast is that it will continue to grow. And it will continue to grow into an ever-evolving regulatory framework.
Aviation could hit a wide range of down 55 to up 15%. USI expects the “competitive environment for certain subclasses should continue with new capacity vying to acquire market share.” But analysts warn of “significant long-term pressure” from the Russian aircraft confiscation, economic and social inflation and geopolitical instability.
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