Market favors buyers, but ‘fragile’: Lockton

Commercial insurance market conditions favor buyers across most lines of coverage, but the market is “fragile,” according to the latest edition of the September quarterly Lockton Market Update Tuesday.

Commercial property insurance market conditions continue to improve for buyers, and commercial cyber insurance pricing continues to decline, “even as concerns grow about accumulating losses,” the report said.

Despite overall favorable conditions, liability remains a significant exception as loss costs continue to rise across virtually all liability lines, Lockton said. Even as rates climb, however, conditions are generally predictable for buyers, the broker said.

Amid the positive market news for buyers were cautions on variables, which could upset the calm.

Insurers are closely monitoring macro factors such as the economy and geopolitical conditions, the report said.

Insurers are also “carefully watching loss trends and reserve adequacy” as social inflation continues to hit attachment points, limits, and rates in third-party liability lines, Lockton said.

“We’re seeing generally favorable market conditions, some of the best we have seen in the last five years, and with insurers reporting strong profits, there’s reason for continued optimism,” Mark Moitoso, Lockton’s risk practices leader, said in the statement. “However, a large, unexpected event could end this stable and predictable market, so it’s critical to be mindful of the uncertainty ahead when evaluating your insurance program.”