Rising Insurance Costs For Commercial Properties Ease, But There’s Still Upward Pressure On Rates

Commercial property insurance rates will continue to rise in 2018, though likely not at the same pace as last year when the country experienced a record number of natural catastrophe losses, reports Willis Towers Watson in its 2018 Insurance Marketplace Realities-Spring Update. 

Overall, property and casualty insurers remain well-capitalized, the report said. The industry recovered and recapitalized swiftly following 2017's record losses — without any insurer insolvencies — thus demonstrating a high level of resilience.

Even so, rates are going to rise this year for many property owners. Willis Towers Watson reports that for non-catastrophe property risks, the change in 2018 will fall between a drop of 5% and a rise of 5%, but for catastrophe-exposed risks, there will be a rise of 5% to 15%.

For insurance buyers approaching renewals, aggressive steps may be rewarded, the report said, although that might involve finding a new insurer.

"Navigating this dynamic marketplace demands a strategic approach, and buyers facing renewals should focus on creating submissions using distinguishing data and narratives to set themselves apart from their peers," Willis Towers Watson Executive Vice President Joe Peiser said.

Last year's property catastrophes may have impacted casualty insurance rates, but so far Willis Towers Watson has not seen a widespread increase in casualty rates this year. Buyers will experience incremental upward pressure on general liability, umbrella and excess liability lines. 

This report is a guide for North American insurance buyers preparing for upcoming insurance program renewals. Willis Towers Watson is a global risk management and insurance brokerage specialist.