| Willis Towers Watson's 2021 Insurance Marketplace Realities Report anticipates hard market conditions to continue in 2021. Lines expected to be hit the hardest include umbrella (30-150% rate increases), property (15-25% rate increases), directors and officers (D&O) (as high as 70% rate increases), and cyber insurance (10-30% rate increases). Rates for workers' compensation are slightly increasing, and are the leading casualty line in terms of COVID-19 claim activity.
"Our experience in this hard market is that there is a wide range of results; renewal results are not huddled around the mean. This means underwriters are underwriting, and there is the opportunity to differentiate your risk," said Joe Peiser, global head of broking at Willis Towers Watson.
A hard market comes about when insurance in the market becomes harder to get and more expensive. Hard marekts usually result from major setbacks, such as a pandemic. The insurance industry works to take in more premiums in order to pay losses during this time. Premiums may be divided to send some to reinsurers, some to reserve funds, and some to investments. Insurers need to stay alert to have enough reserve funds set aside for the near future. Policyholders may even seek other methods to insure their risk, or even go without.
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