2023 P&C Market Outlook
This whitepaper examines trends influencing the commercial insurance space and how these trends impact your business.
Since 2019, the commercial insurance sector has been grappling with a hard marketplace—one that is particularly less friendly to insurance buyers. Such challenging conditions were brought on by a confluence of factors that led insurance companies to reevaluate their positions in the industry. After all, the increased frequency and severity of claims, growing social inflation issues, lasting complications created by the COVID-19 pandemic, evolving cyber threats and worsening natural disasters have fundamentally reshaped the insurance market. As a result, hardened conditions have pressed on for multiple years, prompting limited capacity, stricter underwriting standards and rising premiums across many lines of commercial coverage.
Like many other sectors of the economy, the insurance industry experienced further changes to both its market cycles and operating procedures in the last 12 months. Specifically, in contrast to recent years,
hard market conditions somewhat started to ease. This stabilization became especially evident in the second half of 2022—highlighted by decelerated pricing and expanded capacity within several coverage
segments. While this shift certainly represents signs of an improving insurance landscape, industry experts have asserted that ongoing headwinds facing certain lines of coverage (e.g., commercial
property, auto and cyber) have continued to generate hardened conditions overall, therefore limiting the likelihood of a soft market emerging in the near future.
What’s more, businesses have had to contend with a host of new and existing challenges over the past year. In particular, 2022 marked the third year of the pandemic, which has remained a driving factor in
various workplace adjustments and associated operational difficulties. Additionally, 2022 saw an acceleration of ongoing supply chain disruptions and labor shortages for businesses of all sizes and sectors. Further complicating matters, record-setting inflation trends, the growing possibility of a recession and large-scale international events—namely, the Russia-Ukraine conflict—have only exacerbated commercial exposures. Altogether, these factors will likely continue to fuel an increase in claims and related costs, posing persistent coverage concerns.
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