4 Trends Shaping the Commercial Property and Casualty Insurance Industry

insurance trends in commercial property sector

The year 2022 was the worst one for the property insurance and casualty insurance industry (P&C) since 2011. Insurers are likely to pay out billions of dollars due to severe weather conditions in the United States. 

Hurricane Ian, which struck Florida in late 2022, caused the second largest insured losses after Hurricane Katrina, resulting in $65 billion alone. Swiss Re has revealed that the natural catastrophe losses of more than $100 billion surpassed the ten-year average by 40% last year. 

Even AM Best’s new special report has made shocking revelations. It has been found that the P&C industry lost $24.3 billion in net underwriting in the first nine months of 2022. 

One of the biggest takeaways of 2022 is that updating legislation that permits carriers to cut losses is important. Not just Florida, but the CAT storm seems to have impacted the majority of states in the U.S. Sadly, they show no signs of slowing down, even as we’re midway through 2023. 

Besides these significant weather losses, a great emphasis on ESG (environmental, social, and governance) risks and ongoing supply chain concerns are anticipated to influence the P&C industry in the coming years. That said, here are a few trends that experts believe will shape the commercial P&C industry in 2023: 

#1 The Distribution Landscape Continues to Evolve and Shift

Over the last few years, the insurance distribution landscape has transformed drastically. A few insurtech firms are responsible for this evolution, as they pioneered more digital and user-friendly processes for applying for personal lines insurance policies. 

As embedded insurance continues to grow, reports suggest that merchants, manufacturers, and other non-traditional companies see the potential to enter the market. A report by InsTech London reveals that the embedded insurance market is forecasted to grow to $722 billion in the next seven years. 

In 2021, Rhino joined hands with Cover Genius and introduced the Rhino Renters Insurance Program to create a seamless, end-to-end experience for landlords, renters, and building managers. insurance trends in climate report commercial property sector

#2 Emphasis on ESG and Sustainability Reporting is Increasing

Environmental, social, and governance (ESG) efforts continue to be a strategic and compliance focus for insurers. While it certainly is challenging, it offers insurers the opportunity to make a positive change. 

Over the last three decades, economic damages from climate-related catastrophic events have increased by 250%. That’s why ESG and risk mitigation from climate catastrophes are increasingly incorporated into the mission. Not just that, but they are also becoming integral to the underwriting practices of commercial property and casualty insurance

As per research conducted by Capgemini, it has been revealed that 85% of insurers globally believe that ESG will affect their business functions. With the ESG stance and disclosure requirements of the industry mature, carriers must engage closely with their vendors to assess their business’ ESG impact and maintain compliance. 

#3 Technology is Modernizing the Loss Inspection Process

Commercial property and casualty insurance providers are replacing the age-old, manual methods of FNOL (first notice of loss) with technology. Insurers are relying on robotics and video and image-enabled drones to boost the underwriting and inspection process of property and casualty. 

AI-powered drones are highly efficient, as they can capture accurate videos and images of damages and transfer them to cell phones for real-time assessment. As a result, claims adjusters are able to complete property reviews faster than unsafe manual checks. 

Securance believes that casualty insurance is an important aspect of risk management. Such insurance can save the insurer from irreparable financial harm. From furniture fixtures to IT equipment, commercial property and casualty insurance safeguards everything.Cyber security trends in the insurance industry

#4 Carriers are Preventing Cyber Attacks by Fortifying Customer Data Security

In the post-pandemic world, cybersecurity has become a top concern for insurers globally, and why not? Check Point Research’s new data on cyberattack trends reveals that there was a 38% increase in cyberattacks in 2022 globally compared to 2021. 

P&C insurers are investing in modern technologies like deep learning, artificial intelligence, and blockchain to strengthen database and core systems and detect security lapses. 

Carriers are assessing vulnerabilities, setting up firewalls, and handling sensitive or third-party data with care. They are also making efforts to secure financial transactions to avoid data breaches. 

Cyber attackers target insurance companies because their directories contain confidential data of customers. A few providers have also gone the extra mile by forming in-house teams to manage cybersecurity activities. 

What’s Next?

To sum it up, the commercial property and casualty insurance industry will be undergoing a transformation in 2023 and beyond. The future is promising for insurers who embrace digitization and technology as well as agility. As you move forward, adapting to these trends is important. Otherwise, your chances of thriving in the cut-throat competition would be impossible. 

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