Canadian Underwriter

Stability, finally? What insurers and brokers can look forward to in 2022

November 12, 2021   by Brooke Smith

Bar graph displaying economic recovery

Print this page Share

Brokers and insurers may see some stabilization in the market in 2022.

“We saw tremendous rate pressure, high operating ratios, and low ROIs in 2019 and 2020,” said Kevin Neiles, president, Western Canada and chief markets officer at Gallagher, during a recent Gallagher Talks webinar.

Along with increasing claims costs, this environment “created prolonged and significant pressure in most lines,” he said.

But rate increases overall have been level throughout 2021. “This indicates a bit of stabilization,” said Neiles. “However, we’re still seeing low double-digit increases, on average, on most lines.”



Property rates are rising across the board, although residential realty saw 30% to 50% and higher increases, depending on underwriting factors such as construction, loss results, location and quality of management of the property.

“There are still increases coming through, but as capacity seems to be slowly returning to the market, the increases we’re seeing are more in the 5%-to-10% range,” he said.

For 2022, it’s likely going to be mid-single-digit increases, with potential for minimal or as-is on the best-in-class risks, he said.


General Liability

For general liability, brokers can look for “fairly dramatic increases on the casualty side,” said Neiles. Still, this will depend on the class of business.

Increases and lack of appetite are creating challenges in high-risk business sectors such as host liquor, landscaping and snow removal.

In 2021, the industry has been seeing an average of about 10% premium increases through the last four quarters — even though exposure in many businesses has been down due to pandemic restrictions, he said.


Commercial Auto

Commercial auto, on the other hand, has had modest rate increases. The challenge has been capacity, he explained, particularly on excess liability.

“The premiums themselves were really influenced by a reduction of vehicles on the road [during the pandemic],” he said. “As more vehicles start to get back on the road, we’ll likely see more normal claims resolved and premiums will start to adjust for this.”


Management Liability

Management liability (or D&O) remains a challenging segment, particularly with the large number of actions on publicly listed companies. While the actions in the U.S. are far more aggressive, Neiles said that does impact pricing here in Canada.

There are typically not the large class actions against private companies, he noted, and added “we’re seeing a lot of employment practices liability claims now. And, as we move out of the remote-working environment and back to the office, we could see even more of these.”


Feature image by