Casualty Insurance Markets in 2017: 4 Key Trends to Watch
Over the last several years, new technologies and business models have emerged, leading to new risks affecting casualty insurers and buyers. 2017 promises more of the same.
Based on discussions with insurers and our own observations, Marsh’s Casualty Practice each year identifies key trends we expect to shape the casualty insurance market in the year ahead. Here are some of the highlights for 2017:
A More Aggressive Insurance Market
Interest rates have remained at record lows since the financial crisis, giving insurers relatively few investment income opportunities. To remain profitable, insurers have instead focused on underwriting discipline. But several signs point to a more aggressive marketplace in 2017. To retain existing accounts and secure new ones, casualty insurers may offer more flexible coverage terms. That means more choices and insurer competition for businesses renewing their casualty programs.
An Evolving Workforce
The traditional 9-to-5 workday still exists. But as the sharing economy expands, we’ve seen a shift toward more flexible employment arrangements. More individuals — especially young people — are working part-time or as independent contractors. This raises key questions for businesses, including: Who’s eligible for workers’ compensation coverage? And under what circumstances are they eligible for coverage?
The Internet of Things’ (IoT) facilitation of greater interconnectedness will accelerate and blur the lines between what was, is, or will be covered under general liability, product liability, and cyber insurance policies. Similarly, as autonomous vehicles become more prevalent, the insurance industry will need to determine how personal auto, commercial auto, products liability, and cyber policies will apply.
Meanwhile, insurers are looking to clarify what is and isn’t covered under general liability policies. In 2017, we expect insurers to continue to introduce policy language and endorsements clarifying GL coverage related to drones, 3D printing, and genetically modified organisms.
Focus on Data and Technology
Advancements in technology and analytics allow insurers and businesses to better manage casualty risks. Just as home sensors help personal-lines insurers to better mitigate homeowners’ losses, wearable devices, and other technologies can help employers determine the root causes of workplace injuries and develop strategies to better protect employees. This trend should accelerate in 2017 as sensor technology allows for more variables to be measured.jjc
Which of these trends will affect your business in 2017 — and what effect will they have on your loss prevention, claims management, and insurance purchasing strategies? These are important questions that you should discuss with your insurance and risk advisors today.
For more casualty trends to watch in 2017, read The US Casualty Market in 2017: Our Top 10 List.