Across any business there are always going to be periods of revolution that are vital to your long-term success. And as many readers of Insurance Marketplace Realities likely know, there was an unmet desire in the risk management community that served as WTW’s catalyst towards revolution in 2022 and 2023 – most notably in the development and rollout of our industry specialization strategy. But while continuous growth is necessary, revolution is not a sustainable state in which to operate. Periods of big change must give way to longer periods of incremental change, where the business can settle into the new way of doing things and find new ways to grow. In other words, revolution breaks the ground, but evolution paves the way toward longer-term goals.
Reflecting on 2024, the year could be characterized as one of evolution for WTW North America – incrementally building on the foundation we established over the previous two years. Consider our exclusive new excess liability policy, or the ongoing digitization of our broking platform, or the development and launch of a new client treaty, Client Edge Facility, that creates dedicated property capacity for our clients. All are practical, carefully calibrated moves to further establish and develop our offerings, but they also demonstrate evolution of a broader strategy.
This theme of “evolution not revolution” is also discernible across the market. The industry has not categorically rewritten their position on any one line of business, but rather has taken micro-actions reacting to emerging trends. In property, the reinsurance community continues to bring capital back into first-party business and is even showing an expanded appetite through vehicles like Insurance Linked Securities (ILS) for CAT-exposed risk. The result has led to a demonstrable improvement in both the reinsurance and retail markets. It goes without saying that this state of affairs might only be one major hurricane away from being upended, which with Milton knocking on the door, the probability of disruption is growing.
The cyber and financial markets also remain relatively soft. Capital and capacity are both abundant in these markets but we’re beginning to see the market take a discernible look at financial lines mid-excess layers. Whereas capacity, be it from brick-and-mortar insurers or newly formed MGAs, once rushed into the excess towers, there is mounting trepidation for excess layers attaching between $20 million and $100 million. Insurers are questioning rate adequacy and ILFs more now than in the recent past.
Risk itself is not absolved from evolutionary change. The casualty marketplace demonstrates this powerfully. Not many risk managers or underwriters were talking about PFAs and forever chemicals ten years ago. Now, Praedicat is predicting this could become an $80 billion issue for both insurers and insureds, with a 1% chance that the total expense could exceed $200 billion. Unsurprisingly, this news – not to mention the ongoing pressures of social inflation – is driving a view in the sector that liability lines will not be enjoying a soft market any time soon. Whilst a return to 2020’s rate and capacity challenges is not expected, tougher conditions are widely seen as probable.
Evolution is also visible in the pages of Insurance Marketplace Realities, and this edition sees the debut of our View from the Top interview section. Our first guest is Mo Tooker, Head of Commercial Lines at The Hartford. We’re sure you will enjoy Mo’s insights into the state of the market, evolving capital distribution, and where digitization is taking the industry. Do let us know what you think, as our plan is to make View from the Top a permanent fixture in future issues.
Change may well be the only constant in our business. Risk is evolving, the industry is evolving, and therefore our approach needs to keep evolving, too. From new, specialization-focused client engagement strategies to tighter underwriting conditions in casualty – all the way down to new sections in Insurance Marketplace Realities – every one of these evolutions is welcome evidence of our ongoing drive towards constant adaptation. For those navigating these winds of change, we hope this latest edition of Insurance Marketplace Realities helps you chart your course with confidence.
For more insight on how you can prepare for a challenging marketplace, contact your local WTW representative.
WTW’s Jon Drummond sits down with The Hartford’s Mo Tooker and talks tech, talent, market cycles, the future of the industry and the state of the market.
The property insurance market is stabilizing in 2024 with increased competition and favorable reinsurance renewals. Rates vary by risk profile, and the market may soften further in late 2024.
In late 2023 and early 2024, the insurance industry saw underwriting profits due to personal lines and new business.
We continue to experience positive signs of stability in the property space. Casualty market conditions entered the forefront of renewal discussions as insurers face pressure on liability reserves.
The Canadian casualty marketplace remains highly competitive, with insurers balancing the challenges of a less price-sensitive environment, abundant capacity and the pressure to expand market share.
Canadian insurers faced record CAD $7.6 billion natural catastrophe losses by Q3 2024, yet the Canadian property market retains ample capacity for commercial risks.
The Bermuda insurance market continues to navigate a challenging but competitive environment across all lines of business.
Market stabilization has continued through the third quarter of 2024, even in the face of an ever-expanding threat landscape.
After several years of rate deterioration, historic and new markets are beginning to cite an inability to support further reductions, particularly at the excess layers.
The EPL market continues to be competitive with markets eager to write new business and maintain their renewals.
While primary markets have realigned their pricing to account for long-term loss trends, rate increases for large law firms have been lower in this cycle.
Pricing remains stable as insurers weigh the potential risk associated with artificial intelligence but continue to see favorable loss ratios.
Though there have been both positive and negative litigation developments, a growing number of carriers with increased appetites have led to improved market conditions.
The current marketplace remains full of available capacity driving significant competition across all financial institution industry sub-sectors.
Alternative risk transfer options are in high demand, especially for clients with challenging risk profiles, poor loss experience or who seek to disrupt placements.
Adverse severity claim trends reported by most professional liability (PL) carriers continue without any signs of improvement.
Insurer’s expectations for premium increases are waning with ample capacity driving a competitive marketplace as underwriters seek to maintain premium income.
Captive demand continues to be robust, as evidenced by new formations during 2024. There is continuing involvement in specialty lines and in the creation of diverse portfolios of risk.
In the face of persistent economic headwinds, the resilience of the insurance market is noteworthy.
While the crisis management market remains on high alert following a period of heightened loss activity, the pricing pressures of recent years show some welcome signs of subsiding.
Sector profitability in 2023 and no significant events in Q3 2024 have softened the market but with insurers focused on hitting budgets, competition and stabilization trends are steadily increasing.
The 2025 environmental marketplace will likely be shaped by the influx of carriers and associated capacity that occurred in 2024.
Heightened rates in healthcare professional liability due to systemic strain, physician scarcities and substantial malpractice settlements. Insurer capacity reduced.
An influx of new product and professional liability capacity in the life sciences marketplace is underpinning an environment of ongoing stability.
Market rate conditions are easing but underwriting information, including exposure increases may drive premium increases.
The marine stock throughput program remains viable as property markets remove inventory exposure. Insurers continue to assess CAT risks, reviewing limits and deductibles amid climate concerns.
The marine market has slightly softened but generally requires low single-digit increases due to claim inflation (social and increased cost of repairs).
The personal lines insurance market faces rising rates due to claims, property values and disasters. Selective underwriting and advice are key to managing risks and evolving consumer needs.
As the 2024 year of elections continues to sweep the globe, geopolitical flashpoints emerge.
In the product recall insurance marketplace, rates have begun to flatten this quarter, largely driven by the upcoming emergence of a new market player.
Key observations in the Senior living industry include scrutiny of loss development, reluctance to deploy capacity in litigious venues, and coverage issues involving class actions and communicable diseases.
The U.S. surety market in 2025 is stable, with rate changes from flat to +5%. Influences include political uncertainty, high interest rates and global infrastructure spending.
Despite challenging macroeconomic conditions, market conditions for new insureds remain favorable.
With an increase in the volume of M&A transactions expected, rates should stabilize and begin to increase.
Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for losses relating to the Ukraine crisis. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include coverage relating to the Ukraine crisis. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third-party sources we consider reliable; however, we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. The Ukraine crisis is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.
| Title | File Type | File Size |
|---|---|---|
| Insurance Marketplace Realities 2025 | 9.2 MB |
