Each quarter, we’ll feature one of TPG’s business divisions to learn about industry news and gain a high-level view of their work. This quarter, we spoke with Craig Pankow, Market President & Executive Vice President, Property & Casualty, Commercial Lines.
Craig has been with TPG since 2016 and has more than 30 years of insurance experience. Prior to joining our team, he was president and CEO of PointSure Insurance Services. Craig believes that several commercial insurance trends will feature prominently in 2022, among them:
Cyber liability coverage used to be a policy add-on or throw-in with minimal limits. Today, it is absolutely essential that businesses have insurance against online assault. As a digital-dependent society, we are extremely vulnerable to ransomware and all types of cyber-attacks; our technology has evolved faster than our ability to protect our assets. There are innumerable variables to control – for example, an employee clicks on a seemingly benign email link that sets off a chain of unfortunate and malevolent events. The losses can be immediate, catastrophic, and pervasive. Stay tuned for a TPG webinar later this year on cyber-liability, covering the whys, hows, and staggering costs and losses such attacks can cause.
Property Insurance Rates
The good news? Signs point to property insurance rates leveling off in the coming year. Rate increases are expected to be in the single digits for newer properties less than 25 years old that have a favorable loss record. The bad news? If you have an older building and/or a poor loss history, double-digit increases can be expected. In addition, properties that are in a “high-catastrophe area,” such as wildfire-exposed property in CA, OR, and WA, will likely see significant rate and deductible increases.
Directors & Officers Insurance
We remain in a hard market, but we expect to see rates moderate from the 10% to 40% increases (depending on operations) that we experienced in the first half of 2021. For privately held companies with strong financials and a good claims history, we are anticipating a 5% to 15% rate increase in 2022. London is reporting an improving IPO market, but rates are still staying firm on SPACs.
As much as we would all like to put COVID behind us, we cannot dismiss it quite yet. We continue to face the challenges of vaccination mandates, return-to-office issues, loss of corporate culture, and work-from-home models. Expect the pandemic to continue as a topic of commercial insurance concern, discussion, and action throughout 2022. However, we hope that with rising vaccination rates and natural immunity kicking in, this topic will begin to fade away by the third quarter of 2022.
For more information on these or any related topics, consult with TPG’s commercial lines team.