色多多视频

In one of the toughest markets in recent history, what can buyers expect when buying or renewing? An overview of the excess casualty market, its pain points, and what the future may hold.

By many accounts, the state of the excess casualty market today is one of stabilization. In some situations, that is an accurate assessment. There is some new capacity, mostly emerging out of the excess and surplus lines space and from London and Bermuda markets.

Yet the accuracy ends there. Over the last three years, there has been a significant repositioning of the excess casualty market. Legacy carriers have changed dramatically their appetites. Thanks to social inflation and nuclear verdicts, claim payouts continue to erode at reserves. The result: Brokers, clients, and carriers are challenged with how to navigate what has essentially become a portfolio transformation for carriers.

Since 2015 up to the onset of the pandemic, carriers were seeing mounting claims pressure. In just seven short years, the industry did not change just one thing, but everything. Capacity offered, terms and conditions, pricing, and which accounts to renew were all on the table as carriers tried to stanch the bleeding. As the pandemic bore down, courts shuttered temporarily and judgments came to a halt for nearly two years. As the world returns to business, so have the nuclear awards.

For brokers, making sense of the shifting conditions and setting expectations for clients has become a sizable challenge. Brokers see that while legacy carriers left the space, new capacity entered. Likewise, rates, while remaining positive, have gone through steady decline in the amount of positive rate available in the market. In an atmosphere where rates are holding for some classes of business and capacity is adequate, the question remains: When will clients see a rate reduction?

Increasing Costs
What brokers see does not tell the entire story. Unfortunately, the factors that existed pre-pandemic are arguably greater than before. Loss ratios in the commercial umbrella/excess space had been in steady decline since 2012, with acceleration between 2015 and 2019 driven by an increase in frequency and severity. Broad portfolio rate reductions are not happening, at least until there is a solution to the nuclear verdicts and large payouts.

The median value of the top 50 US verdicts were estimated to be $88 million – a 62% increase over 2018 median award amounts

The prediction for an emerging economy and resumption of business? Higher awards, larger losses. In 2019, the median value of the top 50 US verdicts were estimated to be – a 62% increase over 2018 median award amounts. In the commercial auto market alone, social inflation boosted auto claim totals by more than .

That has led a number of large players to exit the market. With carriers leaving the market, even with new carriers entering the space, capacity will be strained. One report set the reduction of capacity from 2018 to 2020 at . Even carriers who are providing capacity are limiting what they are deploying. Hence, the capacity shortage will continue.

That has left clients making decisions on how much risks they can retain. Some are self-insuring those risks while others are buying less limit that they did previously. As nuclear verdicts continue to erode the capacity in the market, brokers and clients can expect unfavorable rates and reduced capacity.

Carrier Health Matters
For the most part, carriers are working hard to maintain healthy portfolio balances. The goal for us at 色多多视频is to ensure the sustainability of our products so that our clients can have continued coverage without disruption.

Our team is focusing on systemic risk areas, ensuring that risk mitigation strategies are in place to help clients reduce their exposures. We are focused on cyber, sexual molestation, sports brain injury, and the impact of PFAS (forever chemicals) on the environment, our food chain, and water supplies.

Those risks are impacting not just capacity and pricing, but policy terms. As the risks increase, carriers are changing the policy triggers from occurrence to claims made, or are excluding the risk altogether. The goal is to ensure the health of the class of business so that carriers are able to offer coverage into the future.

Facing Every Market Challenge
The market has gone through tremendous change. That change was necessary to keep pace with the mounting claim costs brought on by social inflation, nuclear verdicts, and the emergence of new or long-tail loss exposures. Fortunately, the insurance industry has taken the necessary actions that we hope will lead to more sustainable, consistent products being available to our clients.

Through partnership with our clients, brokers and the industry as a whole, we are confident that the excess casualty market will continue to provide quality products for our clients. With over 30 years of expertise, 色多多视频is determined to be here for our clients and brokers through each market cycle and challenge.