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All indications point to 2021 being a year when more buyers see higher rates for their professional liability insurance. Results from A&G’s 2021 insurance survey
D espite the surprising resiliency of the U.S. construction industry during the COVID-19 pandemic, many insurers providing architects and engineers professional liability insurance have concerns about the prospects for the U.S. economy in 2021. Simultaneously, even as their premiums generally grew last year, these insurers also had worsening loss experience prompting them to consider more significant rate actions this year.
Joan DeLorey
As they reformulate their business plans for this year and beyond, design firms may want to consider how their growth and operational strategies might impact their risk and insurance programs, including related costs. Here are 10 takeaways from the Ames & Gough 2021 survey of 20 leading insurance companies providing professional liability insurance to AEC firms in the U.S. that offer insights on factors influencing their decision-making: 1) Insurers concerned about deteriorating claims experience. Nearly half the insurers surveyed reported their claims experience worsened in 2020, while the other half indicated their claims were similar to the previous year. These realities
are shaping how insurers view their relationships with AEC clientele, including policy pricing, terms, conditions, and available capacity in 2021. 2) Rate hike requests may be more widespread. While 57 percent of the insurers surveyed plan only modest rate increases of up to 5 percent in 2021, one in four expect to raise rates by 6 percent to 10 percent and one in five expect to raise rates above 10 percent. Although insurers applied targeted rate increases in previous years based on an account’s loss experience, project mix, disciplines, and even geography, more now plan to seek higher rates across their entire book. 3) Insurers sharpen focus on risky projects. One
Jared Maxwell
See JOAN DELOREY & JARED MAXWELL, page 4
THE ZWEIG LETTER MAY 10, 2021, ISSUE 1391
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