New entrants and increasing capacity in the Management and Professional Liability (MPL) markets are set to continue to drive up competition — and drive down premiums, according to a new market outlook by Risk Placement Services (RPS).
"This year, flat is now the worst result that many people are seeing, and you might be seeing anywhere from 10% to 20% rate reductions in a number of areas," says Manny Cho, executive vice president, Executive Lines, at RPS.
With price no longer being the differentiator it used to be, Cho says agents need to look at other areas to ensure they're delivering the best for their clients, while also protecting their own books of business.
Here are some takeaways from the 2023 US Management and Professional Liability Market Outlook:
- For Director's' and Officers' (D&O), the average renewal premium is now coming in at between 20% and 30% of the previous year's price, according to Rodney Choo, RPS senior vice president: "It's truly again a buyer's market."
- In Employment Practices Liability, premiums have stabilized and most renewals without a difficult claims history are now seeing flat rates, according to Dave Tardif, RPS area senior vice president.
- Fiduciary lines is no longer an overlooked coverage, according to Jack Rosen, RPS area vice president, due to a changing claims landscape: "A coverage that used to be a throw-in is now facing substantial litigation, and as claims frequency goes up so do rates."
- The Architects & Engineers (A&E) sector is seeing most renewals coming in at a flat rate, but "the majority of carriers are still limiting the amount of capacity that they will put up for any one firm," says Ron Kiefer, RPS senior vice president.
- On the whole, Cho says: "Almost every market we operate in is in a very competitive market situation, with high levels of capacity and good rates and good terms and conditions available. This makes it a difficult market for brokers, and it's in times like these that partnerships come into their own."
