In its report, McGriff cited increasing loss trends in liability lines, historically low interest rates and large weather-related loss events as the top factors driving rates.
“With no changes related to these drivers on the horizon,” McGriff said, “the marketplace will continue to be characterized by a high level of uncertainty.”
The broker expects cyber rates to increase by 30%-100% from last year, reflecting a 139% leap in the number of ransomware attacks in the US in 2020 from 2019. Globally, such attacks rose by 40%.
In addition, McGriff warned that new applicants and existing cyber policyholders needed to prepare for an “exhaustive underwriting process”, including an examination of the security tools they use.
McGriff expects similar hikes this year in energy and utility excess.
“While California wildfire is a key contributor, significant losses related to gas leaks/explosions, pollution and auto liability have decimated results in the excess liability market,” it said.
McGriff sees increases of 20%-100% on renewals. P&C is likely to see overall increases at about 10%, while higher hazard products are forecast to jump up to 20%.
Property rates continue to increase by “at least 15%-25%” for all locations/capacity and coverage limits.
Commercial auto fleets with loss frequency or severity issues could see 40% hikes, McGriff predicts, while excess could rise to 50% depending on class, risk characteristics and loss history.
Real estate and hospitality lines, driven by the frequency of natural catastrophes in 2020 and early 2021 and rising rebuilding costs, are also seeing higher deductibles, specifically for water damage, sometimes as high as $250,000.
Other lines facing big increases include construction, where excess liability rates could jump by as much as 45%; transportation, where excess increases may go as high as 30%; and D&O, which is seeing 15%-25% rate increases on clean accounts, with bigger hikes for accounts with losses or issues.
Workers’ comp had been bucking trends, but rates are starting to inch up as more employers are bringing their workforces back.
The pandemic continues to be a question mark, as Covid-19 claims, telecommuting and other changes in the workforce and employee classification changes get worked out.
