North American perspectives
What will be the tough classes in 2022 and why?
As a new feature we thought that it would be interesting to gather views and perspectives from your side of the Atlantic. We reached out to insurance specialists to get their predictions on what they think would be the tough classes in 2022 and why. The contributors are retail and wholesale intermediaries based in the US.
A bullet point summary of the tough classes, trends and influences are below. The high quality of the material has prompted us to also share the narratives that we received.
General observations and trends
Class of business
- Casualty - social inflation and nuclear verdicts still having an influence but more capacity entering - commercial auto remains very difficult
- Cyber - a tough class with ransomware losses and systemic exposure forcing up rates, reducing capacity and requiring policyholders to change management of their systems
- Habitational with CAT - remains challenging
- Construction - wood frame difficult
- Healthcare - Covid concerns in particular have made this a challenging class
- D&O - capacity still difficult but some easing
- Sexual Abuse & Molestation - casualty exclusion or limit reductions continues
- Increased reinsurance costs - carriers with CAT exposures and loss hit accounts likely will need to pass on at least some of the cost to policyholders or withdraw from the class if capital can be better deployed.
- Consolidation – across the entire industry Carriers, InsureTech, Retail and Wholesale brokers, etc.
- COVID - uncertainties/concerns including legal immunities, delayed disease management, travel restrictions, impact on working practices etc.
- Carrier service levels - Covid restrictions and ageing demographic causing service deterioration makes getting timely quotes more difficult
- ESG – Environmental Social & Corporate Governance obligations are restricting capacity in certain classes, disruptive impact will increase, opportunities created along the way
- Infrastructure/Construction - projects that had been put on hold likely to proceed, massive government stimulus packages and pent-up demand
- Supply chain - inflation and worker shortages across all industries.
More detail and the original source information follows.