The COVID-19 crisis has affected all economies and industries across all business sectors in the world. Insurers are not exempted from the unfolding crisis caused by the pandemic as new and unexpected risks evolve rapidly. As businesses reopen, insurers are trying to assess and model the level of implications and repercussions in all lines of insurance coverage. Many people are looking at the potential availability of business interruption coverage related to losses on property policies. Hauser Insurance wishes to draw attention to Current Professional Liability, Current Management Liability, and Cyber Insurance market Conditions.
These lines of coverage have significantly been affected by the pandemic. Hauser Insurance says that with the increased risk in these coverages, they are experiencing increased rate pressure, more underwriting diligence, and clients are adjusting their coverage. These changes started way before the pandemic. In late 2019 the coverage for private companies was going strong, perhaps due to nearly a decade of pricing softness and increased claims. The first firming increased at a 3-5% rate, which was often neutralized by competitive marketing and YoY exposure growth. The capacity and development of new business remained stable through April of 2020.
Hauser Insurance notes that in May, many insurers started asking for numerous additional underwriting questions and several underwriting diligence on the financial health of companies and the human resource procedures. Recently, insurers have shifted to pricing where they are increasing their rate from 15% to 100% depending on underlying risk and financial and staffing impact caused by COVID-19. Insurers have also revisited and tightened their terms and conditions as they seek to manage their capacity and cut back limits on some risk exposure for their program.
Hauser Insurance adds that insurance companies have retained their renewal business despite these aggressive measures and have 95% insured retention. Most insurers are not interested in encouraging new business, which has reduced competition in the present market. A majority of insurers are more concerned about their current books of business and in preserving themselves from the outcomes of the COVID-19 pandemic.
Original source to learn more: https://www.thehausergroup.com/