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.

Do you agree or have other views?

As always please feel free to contact us with any feedback and we will aim to collate in our next pre-RIMS bulletin.

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.

Offshore oil and gas

Given the rise of ESG and the global push towards green energy initiatives, many carriers are looking to limit their exposure to this sector or have backed out completely (i.e. Zurich recently announcing they will no longer write business for greenfield oil and gas projects). After another year of significant property losses due to CAT storms such as Hurricane Ida, property insurance appetite for the Gulf Coast is also expected to diminish.

However, given the projected continuation of the higher commodity price environment into 2022, the EIA and others have suggested that there will be an increase in commodity production in the Gulf of Mexico to meet strong global demand for crude and natural gas. With more activity will come more demand for insurance products and capacity in an already tight market, which will result in higher pricing, more restrictive terms, and a capacity crunch.

Habitational Property with CAT Exposure

Habitational property has been a difficult property class to place for over a decade, with or without CAT exposure, and the global pandemic added additional exposure concerns for carriers in this line of business. Some of these concerns for underwriters have been changing regulations around tenant evictions, the rise of water damage claims, tenant financial health concerns, less free cash flow for real estate operators, resulting in neglect of maintenance and property upgrades, and the delta between what was reported as replacement cost versus the actual cost of a claim due to inflation in the labor and construction material markets.

Furthermore, 2020 and 2021 were both difficult years for CAT losses where many habitational properties saw losses. Early reports of significant 1/1/22 reinsurance treaty renewal increases are reflecting these losses and are expected to be passed on to policy holders. Given higher reinsurance costs combined with multiple years of losses, many property carriers are looking to limit capacity or even exit this sector. However, with many residences destroyed or damaged by natural disasters, many US cities facing housing shortages, and access to cheap capital for developers, there will be significant demand for habitational properties to be built and operated in 2022. This is expected to lead to further hardening of this market as capacity becomes scarce.


Given the significant uptick in large Cyber claims, pricing has increased dramatically in 2021 and 2022 appears to be no different. With high-profile ransomware attacks making headlines constantly in 2021, many insurance purchasers recognized this threat and demand for Cyber grew dramatically while underwriters became weary of extending more capacity after facing heavy losses. Additionally, given the size of many of these losses, carriers were taking losses regardless of their position on the tower. According to the latest November CIAB report, Cyber rates increased 27.6% on average in 3Q21, which was the largest quarterly increase across the major lines the organization reports on.

Capacity constraints are being slightly offset by the emergence of InsurTech firms, who are moving beyond static questionnaires and using new technology that allows these carriers to probe cybersecurity systems for weaknesses as part of their underwriting process.

Regardless of the carrier, insureds will need to prove that they have sophisticated cybersecurity controls, strong multifactor authentication protocols, and have minimal losses or breaches just to receive a quote.

Insureds that hold large amounts of personal identification information (i.e. credit card processors, cryptocurrencies, blockchain companies, online gaming, healthcare companies, etc.) have become targets of bad actors, which has made finding capacity very difficult for these types of companies.

Technology Errors & Omissions ("Tech E&O")

With the rise of companies involved in blockchain, cryptocurrency, social media, cloud technology, and Web3, there has been a significant surge in demand for Tech E&O. With this rise, there has also been a general increase in the risk for IP infringement, cloud liability, data security, and consumer privacy violations as more of these companies establish themselves in the broader market landscape.

With regards to finding coverage for companies in these spaces, brokers are fighting a battle on two fronts:

1) more Tech E&O claims are occurring as the number of these companies increases and

2) many underwriters do not fully understand these companies or their risks, so brokers are having to do a lot of educating simply to get a quote.

Most carriers are not providing quotes if they do not fully understand the company or if there have been any losses. A once modestly priced product that wasn’t too difficult to place has become very difficult to procure for companies in these industries.

Healthcare and Human Services

LTC (new players in the space): This continues to be a tough class because of past pricing inadequacies and claim activity, carrier and venue availability, and underwriting practices. With new players being seen lately, multi-year deals, and slowing of drastic rate increases on renewals. That being said, given the overall marketplace and the general MPL concerns, it is suspected that this class will continue to be a tough placement in 2022.

Youth exposures (group home, foster/adoption): There are fewer players in the space that are comfortable with underwriting social service organizations that cater to children. Coverage limitations and pricing issues continue to be a concern. Also, finding underwriters willing to meet strict state contractual coverage/limit requirements continues to be problematic.

Staffing: Claims frequency, risk management controls, contractual requirements, credentialling and venue. According to some brokers, staffing to correctional facilities, nursing homes/ALF and hospitals continue to be problematic.

Correctional Healthcare/Criminal Justice: Nothing new here. Market remains a challenge. Carriers are in the class one day, out the next. Claims frequency and severity still problematic when pricing risks. Civil rights claims, claims being reopened and expense costs rising. Providers working in correctional fields often use volunteers, part-time workers or those with difficult claims histories. Tough class to price correctly, even with stringent underwriting rigor.

P&C Brokerage

Property: The market will remain challenging, with rates increasing and lowered capacity, CAT Losses including the recent Tornados in the Midwest, record winds and weather events across the country.

Climate Change: Severe weather events and natural disasters are becoming more prevalent. The market will continue to restrict capacity on property and CAT exposures. While some things are regional (wildfires) - each area of US has its issues.

Construction: There are more construction projects/needs/requests, and the infrastructure bill will pump dollars into the marketplace. Capacity and restrictive Underwriting will be a challenge here.

Excess Casualty Marketplace: Also, still limiting capacity and underwriting in many instances. This has stabilized somewhat, but pricing has not kept up with the proportion of risk exposures. Motor vehicle accidents and attorney involvement. Social inflation, treaty restrictions will likely continue. Trucking / Fleet, habitational excess are most difficult to place (there is not as much wildfire exposed business in the Midwest) but that is an issue too. The more you have to layer, the more likely you are to also run in to minimum premiums. Many retail partners have never experienced this marketplace and have not prepared the customers.


Cyber continues to challenge in all market segments with price, product, capacity and service. Additional challenges in EPL and D&O persist. Covid mandates, social inflation, return to work issues, etc. are all an issue, even for the small private clients.


There are a number of trends playing out. Before the pandemic, there was a driver shortage in the US, as the pandemic has gone on, it’s become worse. This has caused commercial entities that need drivers (including truckers) to have to widen their candidate pool for hiring. This expanded pool, has caused disruption with procuring insurance with current underwriting guidelines and manuals. Driver ages, levels of verifiable experience, and CDL length have all become barriers to filling seats at a time of high demand and is making insurance companies rethink how they traditionally have underwritten an account.

Additionally, factors like the need for rate increases, high physical damage limits with low available truck/vehicle replacements, and much talked about “social inflation”, have not disappeared, but have been exacerbated. With these factors, its anticipated that a high level of shopping amongst insureds which will necessitate finding novel ways to retain accounts as a major route to success in 2022.

Social Services Management Liability/Abuse and Molestation Liability

Closing out 2021, the Social Services Management Liability/Abuse and Molestation Liability sectors remained volatile within various sectors.

It’s anticipated that 2022 will maintain similar trends and hurdles within this product space. Social and environmental uncertainty, heightened public awareness, financial hurdles, and the frequency/severity of claims continue to impact this segment.

Professional Liability

A shrinking limit capacity as well as a more conservative underwriting approach has been seen. With respect to the SAM Liability, package policies are exiting certain social service operations/class and in many cases, package markets are unable to meet the contract limit requirements of these organizations. This continues to drive a significant need for monoline SAM policies.