According to the latest Insurance Marketplace Realities report from WTW, an advisory, broking, and solutions firm, commercial insurance rates have maintained steadiness and balance throughout the year across North America.
WTW notes that new capital entering both the reinsurance and retail markets has intensified competition for premium market share, except in the umbrella and excess liability sectors.
Jon Drummond, Head of Broking, North America, WTW, said: “The industry has not categorically rewritten its position on any one line of business, but rather has taken micro-actions reacting to emerging trends.”
This increased competition has had a significant impact, especially in 1st party business lines, where capacity constraints were a concern at the beginning of 2024.
Capacity continues to be a key factor driving soft market conditions in financial lines. While WTW cautions that it’s too early to declare a trend, there is growing attention to rate adequacy in mid-excess Directors & Officers Liability.
In the Cyber insurance market, flat to mid-single-digit rate decreases are anticipated for most renewals in the near term.
In casualty insurance, Umbrella & Excess liability has experienced the greatest disruption. Rising loss costs, driven by factors such as legal system abuse, litigation financing, and emerging risks like “forever chemicals,” have led insurers to reduce available capacity and push renewal rates beyond high single digits.
WTW’s report concludes that while the industry is undergoing significant changes across various business lines—due to factors such as climate change, nuclear verdicts, and new capital entrants—the market is expected to maintain relatively stable renewal conditions across most lines as the year draws to a close.
Drummond added: “It goes without saying that the current state of affairs might only be one major hurricane away from being upended, and with Milton knocking on the door, the probability of disruption is growing.”
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