Key Insights for Q2 2021 Property & Casualty Market Trends

While some trends were more moderated than in quarters past, bringing hope for a softening market in the future, market hardening persisted once again in Q2 2021. Pricing increased 8.3% across all-sized accounts, marking the 15th consecutive quarter of consistent premium increases. Large and medium-sized accounts increased by 9.3% and 9.4%, respectively, while small accounts increased by 6.2%.

Premiums also increased across all lines of business for the fifth consecutive quarter, and while much is the same, there is a new line atop the list of these premium increases. In perhaps the biggest storyline of Q2 2021, Cyber Liability premiums continue to rise at a meteoric pace. Pricing increased at a dramatic rate of 25.5%, solidifying it as the most troubling line of business. 

Cyber Liability

Cyber Liability lines experienced by far the most significant hardening trends in Q2 2021. Ransomware and other forms of cyberattacks are at all-time highs and have turned what was once considered a niche line of coverage into an absolute necessity for businesses across all industries. 

Cyber Liability rates increased at an alarming rate of 25.5% in Q2 2021. CIAB survey respondents also reported a 79% increase in claims activity and a 95% increase in demand for coverage. The sheer volume of attacks, mainly ransomware, has contributed to Cyber’s meteoric rise in hardening trends.

Commercial Property

Commercial Property rates increased 9.9% in Q2 2021. Like many other lines of business, shrinking coverage was the norm, as 52% of CIAB survey respondents noted a decrease in capacity. Survey respondents also mentioned increased pressure on Property deductibles, citing wind and rain as a prime example. 

Heading into Q3, we will be monitoring the aftermath of Hurricane Ida’s impact on the Gulf Coast and beyond. The storm made landfall in Louisiana as a Category 4 hurricane on August 29 and left extensive damage in its path, including a citywide blackout in New Orleans. While the damage is still being calculated, initial estimates put the totals in the range of $27 to $40 billion. Uninsured losses are currently estimated at $19 billion, while insured losses are currently estimated at $25-35 billion. Though only 40-50% of Ida’s flood damage was covered by insurance in the Gulf Coast, this number represents an improvement from uninsured flood damages seen in Hurricane Katrina and Hurricane Harvey. 

Outside of the Gulf Coast, the storm’s remnants also wreaked havoc on the east coast, notably causing widespread flooding in major metropolitan areas like New York City as well as in New York State, New Jersey, Pennsylvania, Delaware and Maryland. The storm has historical significance for New York City, as it prompted the National Weather Service to declare the first flash food emergency in the city’s history. Damage totals for Ida’s remnants have not yet been calculated, but they are expected to be significant.


Though it was overtaken by Cyber as the most troubling line of business in Q2 2021, Umbrella/Excess Liability premiums continued to sharply rise in a marketplace that is only getting smaller. CIAB survey respondents reported a 17.4% premium increase, and while it’s a slightly more mild increase than last quarter (19.7%), the marketplace continues to shrink at a rapid pace.

Seventy-three percent of survey respondents reported a decrease in Umbrella capacity in Q2 2021, similar to previous quarters. The reasoning behind this continued rise in price and decline in capacity has been covered at length in previous reports and mainly includes factors such as nuclear verdicts, historical underpricing, and perhaps most prominently, the phenomenon of social inflation. 

Social inflation is a grouping of several trends, including a general increase in litigation, more plaintiff-friendly juries, and litigation financing (plaintiffs being backed and funded by an ‘investor,’ allowing for a more drawn-out legal process leading to higher jury awards).  

Looking Forward

As we enter Q3 2021, there are several key issues we will continue to monitor. 

As Cyber-related incidents continue to evolve and become more costly for insureds, pricing increases, capacity and underwriter scrutiny will all be put to the test. Ransomware activity moving forward will need to be closely examined as we enter what looks to be another problematic quarter on the cyber liability front.

Following the widespread destruction of Hurricane Ida, Property lines will also need to be watched closely as damage totals are confirmed, and we gain a better understanding of insured vs. uninsured loss ratios.

We will also be watching the lines with more moderated pricing increases in Q2 2021. This progress is promising, giving hope that a softening marketplace is on the horizon. 

Please complete the form below to receive a copy of the Q2 2021 market report. This comprehensive report features a more in-depth analysis of each line we are continuing to monitor.  State of the Market,Commercial Insurance