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Risk in Context

Casualty Insurance Trends to Watch in 2016

Posted by Stephen Kempsey January 20, 2016

At the start of 2016, casualty insurers face a challenging marketplace, with pressure to rethink their approach to underwriting and a growing need to offer competitive terms to buyers in a difficult economy with low interest rates. What’s in store in the year ahead?

Based on observations of the market and discussions with insurers, Marsh’s Casualty Practice identified the following five trends that are likely to play out in the casualty insurance market in 2016:

  1. How low can rates go? Facing stiff competition, insurers are likely to remain aggressive and flexible on renewal terms across most casualty insurance lines.
  2. Auto Wars: The Market Awakens. The exception to generally favorable conditions for buyers is in auto liability, where losses continue to climb. Detailed information about your loss control programs, including telematics and driver training can help you to differentiate your unique risk profile.
  3. It’s a small world…and getting smaller. Domestic insurers are looking to cut costs and create synergies, while European and Asian insurers are looking to gain footholds in the US. Both are likely to drive continued consolidation in the industry.
  4. Bespoke underwriting: The tailor is in. To drive profitability, insurers will take a closer look at individual accounts they are underwriting.That includes using data to make more targeted risk selection and pricing decisions. Using client-specific data and explaining favorable exposure nuances can best position you to outperform your peers at your next renewal.
  5. The walls came tumbling down. Many insurers are looking to make underwriting decisions across product lines, including primary, excess, and international casualty. Insurers that can do so should be able to offer their clients more favorable pricing and more complete coverage with fewer gaps.

Tomorrow I’ll cover five more trends driving the casualty insurance market.

Related to:  Casualty

Stephen Kempsey

Steve Kempsey is Marsh’s US Casualty Practice Leader. He has full management and oversight responsibilities for Marsh’s various casualty businesses in the United States; including primary, excess, international, workers’ compensation, and various specialty industry offerings.