2021 U.S. Property Market Outlook
The rate increases and capacity restrictions that distinguished the U.S. property market throughout 2020 were a harbinger of things to come. Price increases on property insurance will accelerate in 2021 as we bid adieu to a year marked by a pandemic and its economic fallout, coupled with record-setting catastrophe losses.
What can independent agents and brokers do to navigate the property market for their clients?
Here is what is expected on the horizon for 2021:
- Every commercial property insurance buyer will feel the effect of a firming market
- Reinsurance will play a larger part in pricing terms than in the years past
- Rate increases in the high-single digits to 15% range on clean accounts, higher on accounts with losses
- Catastrophe deductibles converted from flat dollar amounts to percentages, and percentages increasing from 2% to as high as 5% in some areas
- Multiple insurers needed to assemble higher excess coverage limits
- New communicable disease and riot exclusions being introduced
- More restrictions on time element, ingress/egress business interruption (BI) cover
- Builders’ risk extensions moving into E&S market
- Enhanced scrutiny of hospitality industry accounts
