Commercial Insurance Premium Increases Moderated Slightly in 1Q

Commercial insurance premiums continued to increase during the first quarter of 2022, marking the 18th consecutive quarter of premium increases, according to the Council of Insurance Agents & Brokers' (CIAB's) Commercial Property/Casualty Market Index.

There were signs, however, that market conditions might have eased slightly during the quarter, the CIAB said. The average premium increase across all account sizes was 6.6 percent during the first quarter, down from 8.7 percent during the fourth quarter of 2021.

The CIAB said its index revealed a similar picture when looking at lines of business. Premiums increased by an average of 5.7 percent in the first quarter across fie major lines—commercial property, commercial auto, umbrella, general liability, and worker compensation—down from 8.1 percent in last year's fourth quarter. Increases in most lines were 2 percent lower than in the fourth quarter, the CIAB said, with workers compensation showing an average 0.5 percent decrease in premiums.

While prices moderated among other lines, cyber insurance remained an issue, the CIAB reported. Cyber insurance premiums increased by an average of 27.5 percent during the first quarter, compared to a 34.3 percent increase during the fourth quarter of 2021. The CIAB found that the primary factors behind the continued cyber insurance price increases included the increasing frequency and severity of cyber claims, as well as the combination of reduced insurer appetite for the risk and increased buyer demand.

In addition to the premium increases for cyber insurance, insurers attempted to mitigate losses from cyber claims through stricter underwriting requirements, including making such cyber-security protocols as multifactor authentication mandatory for buyers, the CIAB said.

The CIAB said commercial property also was a focus during the first quarter, with increases in property values occurring due to high demand for commercial property compounded by recent inflation trends. As property values were updated in policies, those corrections resulted in increased premiums, the CIAB said.