Balance with “Micro-shares” in the commercial market, but Milton could disrupt

WTW characterized commercial insurance rates as balanced and stable, but as Hurricane Milton approached, the broker warned of a future disruption.

“The current state could be just one major hurricane away from overturning, and with Milton knocking on the door, the likelihood of disruption is increasing,” Jon Drummond, head of North American brokerage, said in a released statement a few hours before. Milton made landfall in Florida as a Category 3 hurricane.

In its Marketplace Realities report released Oct. 4, which provides price forecasts through 2024 for 30 trade lines of business, WTW said rates have so far been balanced and stable.

“The industry has not categorically rewritten its position in any line of business, but rather taken micro-actions that react to emerging trends.” Drummond said.

Reinsurers continue to bring capital back to primary property risk – with some appetite extended by catastrophe risk-linked securities. Rates for catastrophe-exposed properties are expected to drop 5% to 10%.

Cyber ​​and financial markets remain relatively lean with plenty of capital and capacity. Cyber ​​rates are expected to remain at least flat for the rest of 2024, WTW said. However, there is some emphasis on the appropriateness of the average directors and officers excess liability rate.

“After several years of rate deterioration, historical and new markets are beginning to cite an inability to sustain further reduction, particularly in excess strata,” WTW said of D&O. The broker expects prices here to land in the -10% to flat range for both public and private primary D&O.

The biggest disruption in 2024 is in the umbrella and excess due to rising litigation costs and growing concerns such as PFAS, the broker noted.

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Commercial lines Business Tech. insurance