COMMERCIAL INSIGHTS
2023
Commercial Insurance
Outlook
A SHIFTING MARKET
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 .
With this in mind , industry experts anticipate that the commercial insurance space will remain challenging in 2023 , although it may present more favorable conditions than it has in prior years for some insurance buyers . In any case , it ’ s essential for businesses to take a proactive approach to bolster their risk management efforts and secure adequate coverage during this time . Especially amid an evolving risk
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