Most insurers providing professional liability insurance for architects and engineers intend to raise rates this year, according to a report released Wednesday by specialty insurance broker Ames & Gough. The increase reflects concerns about the ongoing effects of inflation on claims expenses, economic uncertainty, and the emergence of new exposures, including artificial intelligence.
Of the insurers surveyed this year, 71% are seeking rate increases, 24% plan to keep rates flat, and only one insurer anticipates reducing rates, Ames & Gough reported. The survey included responses from underwriting executives at 17 leading insurers offering professional liability coverage to architects and engineers.
Insurers remain worried over the impact of inflation on claims and costs, with 83% of those surveyed citing inflation as a factor driving their decision to implement rate increases. Moreover, 67% of insurers plan to target rate increases for accounts with adverse loss experience.
These planned rate increases are scheduled to take effect despite previous profitability and premium growth. In 2024, insurers experienced premium growth for the fourth consecutive year, with nearly one-fourth seeing double-digit percentage increases, the report indicated. Of the 14 insurers that reported premium growth in 2024, almost 29% had growth of 11% to 15%.
Thirteen of the 17 insurers surveyed this year had already raised their rates in 2024 due to consistently poor claims experience and heightened risk.
Ames & Gough, which has offices in Boston; Philadelphia; Orlando, Florida; Charlotte, North Carolina; and Washington, D.C., serves more than 1,700 architects, engineering firms, and other construction professionals.
