September 16, 2021
2021 Q2 Commercial Insurance Pricing Trends

Market Observations:
- Market hardening trends continued for the 15th consecutive quarter in Q2 2021, with pricing increases across all size accounts.
- Pricing increased across all commercial lines of business for the fifth consecutive quarter.
- While pricing increases did continue, Q2 2021 saw more moderated increases than in previous quarters. The average premium increase across all lines of business in Q2 2021 was 8.1%, down from 9.6% in Q1 2021.
- Cyber Liability solidified itself as the most troubling line of business with a 25.5% premium increase, taking over the top spot from Umbrella/ Excess Liability lines (17.4% increase).
- Ransomware, a lack of appropriate risk management protocols, and inadequate employee training are highlighted as key factors behind Cyber Liability premiums’ meteoric rise.
- Underwriting tightened significantly for both Cyber Liability and Umbrella/Excess Liability lines. CIAB survey respondents noted an 80% decrease in capacity for Cyber and a 70% decrease in capacity for Umbrella/Excess.
- Commercial Property lines experienced a 9.9% premium increase in Q2 2021, down from 12% in Q1 2021.
- Workers’ Compensation premiums also saw a more moderate increase than in Q1 2021, with rates climbing at 0.3%.
Looking Forward
As we enter Q3 2021, there are several key issues we will continue to monitor.
As Cyber-related incidents continue to evolve and become more costly for insureds, pricing increases, capacity and underwriter scrutiny will all be put to the test. Ransomware activity moving forward will need to be closely examined as we enter what looks to be another problematic quarter on the cyber liability front.
Following the widespread destruction of Hurricane Ida, Property lines will also need to be watched closely as damage totals are confirmed, and we gain a better understanding of insured vs. uninsured loss ratios.
We will also be watching the lines with more moderated pricing increases in Q2 2021. This progress is promising, giving hope that a softening marketplace is on the horizon.
Source: CIAB Q2 2021 Commercial Market/Casualty Market Index