Anticipated Rate Hikes for Professional Liability Insurance
The majority of insurers offering professional liability insurance for architects and engineers are planning to increase rates this year. This decision is driven by ongoing inflation concerns affecting claim costs, economic uncertainties in the U.S., and emerging risks such as artificial intelligence, according to a recent report by Ames & Gough.
Survey Insights
Out of the insurers surveyed, 71% are aiming for rate hikes, 24% intend to keep rates steady, and only one insurer is considering a rate reduction. The survey, conducted this year, included feedback from underwriting leaders at 17 major insurers in the architects and engineers professional liability insurance sector.
Inflation and Its Impact on Insurance
Inflation remains a significant concern, with 83% of the insurers surveyed indicating it as a factor in their decision to implement a rate increase. Additionally, more than two-thirds, or 67%, of insurers plan to focus rate increases on accounts with adverse loss histories, a trend consistent with past practices.
Industry Profitability and Growth Trends
The planned rate increases come in the wake of previous profitability and growth. In 2024, insurers experienced premium growth for the fourth consecutive year, with nearly a quarter reporting double-digit percentage increases. Of the 14 insurers that saw premium growth in 2024, almost 29% reported growth between 11% and 15%.
Rate Increases and Deteriorating Claims Experience
Among the 17 insurers surveyed this year, 13 raised their rates in 2024 due to ongoing deterioration in claims experience and increased risk.
Ames & Gough’s Reach
Ames & Gough operates offices in Boston, Philadelphia, Orlando, Florida, Charlotte, North Carolina, and Washington, D.C. The firm serves more than 1,700 clients, including architects, engineering firms, and other construction professionals.
