Inflation Drives 2023 Property & Casualty Rate Increases
January 3, 2023
Inflation is driving rate hikes for property & casualty in 2023 – and for all insurance carriers.
Inflation is driving rate hikes for property & casualty in 2023 – and for all insurance carriers.
Higher food prices, increasing material costs and rising labor costs compounded in 2022. Inflation has hit every sector of the U.S. economy, and the property & casualty industry is no exception.
Inflation is driving rate hikes overall in 2023 – and for all insurance carriers. The question is how much more will you pay for coverage this year?
No one can say with certainty what rate increases will be, but it is clear property & casualty has been affected by wage, medical and social inflation.
Based on a wide variety of data and information, here are predictions for rate increases in 2023:
These are our best projections moving into 2023, so be prepared for possible variations. Still, the driving force behind these numbers is inflation.
The good news is that as of December 2022, inflation has come down to 7.1% year over year. The bad news is that if inflation continues to be above the historic average of roughly 2.5% (Consumer Price Index), this will ultimately have a negative effect on rates.
And it’s important to remember that your company’s individual risks, loss/claims history and risk-prevention measures affect your insurance rates.
One thing is certain — many variables will affect rates in 2023.
Cyber insurance has the fastest-rising rates. Still, this coverage is more important than ever. It’s becoming a necessary cost of doing business today.
That’s because cyberattacks have increased almost 45% year over year. And big corporations and government agencies aren’t the only targets. Nearly 75% of all attacks focus on small- to mid-size companies with 10 to 1,000 employees.
One way to protect your network is multifactor identification. In fact, most carriers require multifactor to obtain a cyber policy. If you don’t have this protection, consider adding it to reduce your risk and price for cyber insurance.
While none of us can avoid inflation entirely, there are ways to control rising rates. Talk to your broker about discount programs. Or see whether a self-insured plan is right for your business.
It’s also a good time to review your coverages. Talk to your insurance broker about your options for lowering insurance costs. Together you can create the best insurance package for your business.