Broker Woodruff Sawyer has forecast that US commercial property rates could rise 30% or more for the most challenged exposures as hurricane Ian dashed hopes of any relief for buyers, but added that the most favourable risks may see flat renewals in 2023.
Casualty rate movements are expected to be less severe than property although excess markets will be more challenging, the broker added.
Accounts with heavy catastrophe exposure that have shown little risk improvement and an unfavourable loss history could see the largest property increases of 30% or more, the brokerage said.
It predicted that those without catastrophe exposure but still displaying little risk improvement and unfavourable loss history could see increases of 15% or more.
Catastrophe-exposed risks that have shown improvement and a favourable loss history are forecast to see increases of 5% to 10%.
Property accounts with a favourable loss history, risk improvement and without catastrophe exposure could see an increase of 0% to 5% in 2023, Woodruff Sawyer said.
In casualty markets, commercial general liability is expected to see increases of 2% to 7%, while commercial auto markets are expected to see increases of 5% to 8%.
Umbrella and excess liability coverage was described as a “difficult environment”. Large companies with revenue of $1bn or more could see rate increases of 6% to 15%, while middle-market and small companies are forecast to see rate increases of 4% to 10%.
The broker added that losses tied to hurricane Ian have shifted earlier market forecasts.
“Before hurricane Ian, there was some hope commercial property rates would stabilise and, in some cases, insureds would obtain rate reductions. Post-Ian, that hope has all but disappeared” it said.
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