In an effort to stamp down on rising exposures and claims costs, Houston International Insurance Group company Great Midwest Insurance Company will make several tweaks to its Casualty Umbrella and Excess Liability Insurance manual that will result in higher pricing.
While its proposed changes will not have an immediate rate impact, increases to rating factor ranges and minimums on several risk segments under its excess line will likely result in higher rates during the underwriting process. These changes have been tentatively scheduled to go into effect initially in Oregon on Jan. 1, 2021, though are currently pending regulatory approval and could come to other markets in the coming weeks.
While minimum underlying limits on its excess program will stay the same, typically requiring $1 million for most coverages such as businessowners and commercial automobile liability, minimums on most of the program’s excess factors under various hazard grouping tiers will be increased.
These minimum increases will vary by insurance coverage. Premises/Operations & Employee Benefits Liability factors, for example, will increase hazard groups—which are sorted by medium, high, and severe for underlying limits of $1 million and $2 million—resulting in a range of rating factor changes. These groups will increase factors from 10-15 percent to 12-17 percent, 15-20 percent to 20-40 percent, and 20-25 to 25-50 percent, respectively, under the $1 million limit tier.
Similar rating factor increases will also apply to employer’s liability, products/completed operations, auto liability, and excess limits. As several of these excess factor changes will impact higher exposure risks in commercial auto excess such as trucking, along with increases to unit rates, this move is likely intended to limit the impact of claims in these segments which are on the rise.
Rating factors for excess layers up to $25 million will also see increases, most notably for underlying coverages of $5 million with an excess layer of $5 million, which will increase factors from 50-70 percent to 100-150 percent. Minimum premiums will also be raised. Lead excess or umbrella coverage under the first $1 million of excess coverage will now require minimum premiums of $750 for low and medium hazard groups, $1,500 for high hazard groups, and an increase from $1,000 to $3,000 for severe hazard groups.
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