At this point, it is very difficult to predict what the full impact of the economic downturn and the COVID-19 pandemic will have on the Property & Casualty insurance marketplace. What we do know is that the insurance industry is facing unprecedented challenges, which experts feel will continue through the end of the year and well into 2021.
Currently, Property & Casualty, Umbrella/Excess Liability, and Directors & Officers (D&O) Liability markets are experiencing the most impact.
Property: All across the board, the property sector is experiencing steep rate hikes, coverage restrictions/limitations, and many other challenges resulting from a combination of factors that include social inflation pressures, persistently low yields, and a large number of underwriting losses, including COVID-19 claims and corresponding lawsuits.
Casualty: Rate increases, coverage restrictions, and stricter underwriting standards are commonplace, and it is anticipated that COVID-19 will exacerbate the current market dynamics across all lines including Workers' Compensation.
Umbrella & Excess Liability: The Umbrella/Excess lines experienced the most substantial hardening during the first two quarters of 2020.
Directors & Officers (D&O): A hardening in the D&O marketplace was in play before COVID-19 and it is worsening. It continues to experience premium and retention increases influenced by concerns of increasing claim severity.
So, what can you do?
Start your renewal discussions early. With many underwriters working remote, the renewal process is taking longer due to processing backlogs and stricter underwriting guidelines. Time and thorough preparation will be needed for a successful renewal.
Risk Management: With stricter underwriting requirements and guidelines, having a solid risk management plan shows that your organization is proactive in helping reduce or eliminate claims.
