Insurance Premium Increases Slow Despite Market Challenges, CIAB Survey Says

Despite a slowdown in premium increases, The Council's Q4 2023 survey reveals rising commercial property premiums and customer dissatisfaction, prompting brokers to prioritize enhancing customer experience.
By: | March 5, 2024

The Council of Insurance Agents & Brokers’ Q4 2023 survey reveals a slowdown in commercial property/casualty insurance premium increases across the board, despite continued market challenges.

The survey of CIAB member firms showed an average premium increase of 7.0% in the fourth quarter across all account sizes, a decrease from the 8.1% increase in the previous quarter. This marks the 25th quarter of consecutive increases, albeit at a slower pace. Notably, cyber premiums and D&O saw minimal increases of 0.7% and 0.1% respectively.

Commercial property premium increases, while still the highest among all lines, saw a significant drop to 11.8% in Q4 from 17.1% in Q3. This was attributed to ongoing issues such as reinsurance affordability and availability, increased natural catastrophe losses, and inflation. These factors led to carrier caution in deploying underwriting capacity for commercial property, making it a significant challenge for brokers during placement.

The CIAB survey also highlighted the impact of these market conditions on brokers’ clients. About 62% of commercial P/C clients reportedly experienced rate fatigue, a decrease from the previous quarter’s 70%. However, 55% felt burdened by carrier requests for information, an increase from 45% in the last quarter. Additionally, 45% of clients expressed some level of mistrust for the P/C insurance industry, a slight increase from the previous quarter’s 42%.

“Underwriting requests and needs continued to change,” explained one respondent. “Clients will make risk improvements, specifically in property and cyber and then the next year there are additional requirements…. As a result, some feel they are chasing a never-ending system where they have to make improvements to obtain coverage and then are hit financially both with improvements and premiums.”

In response to these challenging conditions, enhancing the customer experience has become a top priority for brokers in 2024. More than half of the respondents (52%) named it as one of their top-three priorities. Brokers hope to leverage AI to streamline customer interactions and improve client and employee access to data, aiming to serve clients “when, how, and where they desire.” This strategic focus on customer experience is seen as crucial for client retention in the current rate environment.

“Retaining business is always key, but more difficult than ever in this marketplace. Clients are more likely to look at other options including other brokers. We’re looking for more people and better processes to keep servicing our clients in the way they have come to expect,” said one respondent from a large Southeastern firm.

Access the full report here. &

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