Insurance market update, what to expect in 2022


2021 marked the fourth straight year of a hard insurance market. Some industry experts have even described conditions over the past four years as one of, if not the toughest period on record for the insurance industry.

There are however some early signs of improvement. Recent findings from multiple industry sources suggest that the purchasing environment for insurance buyers is trending in a more positive direction across some (but not all) key segments of the market. Insurance premiums are expected to continue rising in most areas, but at a lower rate than 2021.

Below we highlight some industry trends and predictions which been extracted from comments made by various rating agencies, insurers, reinsurers, and insurance brokers on what you can expect in 2022 for your corporate insurance programs.

A Demand for Insurance Spurring Record Premium Volumes

According to Swiss Re’s latest sigma study, rising demand for insurance could lead to a new record in global premiums by mid-2022, exceeding USD 7 trillion. This expected growth reflects a rising risk awareness in the wake of the ongoing pandemic, increasing demand for protection, and rate hardening across the non-life insurance commercial lines.

Swiss Re predicts that non-life premiums will grow by 3.7% in 2022 and 3.3% in 2023. This is on the back of an estimated 3.3% growth in 2021.

“Market conditions suggest that positive pricing momentum will continue across all lines and regions,” said Jerome Haegeli, Swiss Re Group’s Chief Economist. “Inflation-driven higher claims development in all lines of business continued social inflation and persistently low interest rates will be the main factors for market hardening,”

The industry outlook is also supported by a strong cyclical recovery from the COVID-19 pandemic, but economic growth is expected to slow in the next two years due to a growing crisis in energy prices, prolonged supply-side issues, and inflation risks, the study found.

Steady and Stable Despite Tricky Conditions

A recent study released by Fitch Rating’s shows that Property and Casualty (including Liability) insurers are poised to enjoy steady underwriting profits and earnings in 2022 despite challenges from higher inflation and a likely reduction in contributions from investment gains.

The study found that underwriting profitability for the Property/Casualty insurance industry is likely to improve to a combined ratio of 97% in 2022 due to continued favourable commercial lines pricing. However, if higher inflation persists, profitability and reserve strength would be expected to weaken in longer-tail segments, including certain liability lines. The report also indicated that evolving catastrophe risk exposures may add further volatility.

Fitch expects 2022 to be the fifth successive year of pricing increases, although at a lower rate than in 2021. Fitch’s analysts also believe that the risk of rising inflation will remain manageable for the industry in 2022.

AM Best has also revised its 2022 commercial lines market segment outlook from negative to stable across a number of key markets/geographies despite several near-term challenges including inflation, an uneven economic environment, and continued pressure on jury awards and settlement costs.

AM Best analysts cited the relatively modest negative impact of the COVID-19 pandemic, continued strong pricing momentum, and favourable rulings to date on many business interruption coverage disputes.

They also revised their outlook ratings from negative to stable for both commercial property and financial lines of insurance. However, the outlooks for commercial motor, general liability, medical malpractice, and professional liability lines remain negative.

Cyber Market Conditions Continue to Harden

Increasing claim payouts and shrinking profits is causing insurers to reduce the amount of cyber cover that they are willing to provide at a time when the demand for coverage is higher than ever.

All throughout 2021 insurers were looking to limit their exposures by limiting coverage and capacity while charging higher rates across the board, regardless of an organisations size or profession. According to one major global broker, rates increased on average by 50% for attractive, high-quality risks with minimal to no claims experience, while those with poor claims records or lacking security controls experienced significantly higher increases ranging from 100% to as much as 300% in some cases.

Insurers have also been adopting higher levels of scrutiny when evaluating risks, asking for more information around organisations cyber security controls than ever before.

S&P Global believes that the ongoing pandemic and remote working conditions emanating from the crisis have caused insured losses from cyber-attacks to skyrocket. This, in turn, has led to a heightened awareness of the risk and increased demand for cyber re/insurance.

“The trend toward digitalisation will inevitably lead to a higher likelihood of cyber incidents. Prices in the cyber re/insurance market could therefore rise sharply over 2022-2023, even doubling in some cases,” said S&P Global.

Anticipated / Expected Percentage Increases Across Major Classes

Property / Business Interruption:

  • Non-Challenged Occupancies:- +2% to +10%
  • Challenged Occupancies:- +15% Plus


  • General Liability:- +5% to +12.5% Plus
  • Umbrella Liability (High Hazard) - +10% to +30% Plus
  • Umbrella Liability (Low / Medium Hazard) – Below + 20%
  • Cyber Liability - +50% to +150% Plus
  • Directors & Officers – (Public Company) – Flat to +25%
  • Directors & Officers – (Private & Not for Profit) - +5% to +40%


  • General Liability - +5% to + 15%
  • Umbrella Liability - +15% to +25%
  • Project Specific Builders Risk - +5% to +15%
  • Professional Indemnity - +5% to +10% Plus

Healthcare Professional Indemnity:

  • Primary Layer - +5% to +25%
  • Excess Layer - +15%
  • Hospital - +5% to +25%
  • Allied Health - +5% to + 15%
  • Physicians - +5% to +15%

Marine Hull & Liability:

  • Hull & Machinery (Good loss record) - +10% to +15%
  • Hull & Machinery (Poor loss record) - +20% Plus
  • P&I - +12.5% Depending on individual club performance
  • Marine Liability - +15% Plus

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