The commercial insurance market is constantly evolving, driven by shifts in the global economy, emerging risks, and innovation. As insureds address new and existing challenges, carriers are adapting to meet the demands of the market. In this blog, we will discuss five market trends that McConkey is monitoring now and into the future.
Stabilization of the Property Market
Many carriers have adjusted their approach to underwriting and loss financing to mitigate volatility. This includes, an increased emphasis carriers on underwriting standards, particularly Insurance to Value. Carriers have also decreased their appetite for specific property such as wood frame construction. Underwriting changes like these enables carriers to better assess and manage their exposure to loss, leading to increased profitability. Carrier loss financing has also seen a shift toward a more proactive approach, as illustrated by the market expectations following the massive losses from hurricanes Helene and Milton. Many industry experts have expressed optimism that carriers have incorporated these loss costs into their 2025 pricing strategies, aiming to avoid knee-jerk reactions in future pricing. Rate stability can also be attributed to less volatility in the reinsurance market. As carriers’ reinsurance costs temper, so do the subsidizing costs felt by the end consumers. McConkey will continue leveraging our extensive market access and data to align insureds’ programs with the most suitable carrier partners.
Management Liability Continues to Soften
As the year draws to a close, Management Liability carriers have continued to achieve strong results. Claims activity has been reduced leading to sustained carrier profitability. This success has intensified market competition, giving McConkey a strategic advantage in negotiations, resulting in favorable pricing and potential coverage enhancements. The soft market has also changed some carriers’ renewal strategies. Automatic renewals at flat to nominal increases have become more prevalent as carriers aim to reduce the risk of competing quotes. McConkey remains committed to delivering added value to our clients. Our exclusive market access to industry-specific programs, connections with motivated new market entrants, and in-house claims resources are just a few ways we continue to enhance our clients’ programs.
Cyber Crime Persists – Continued Frequency and Increased Severity
Cyber Liability remains a focus as cyber-crime continues to evolve and scale. The beginning of 2024 saw a significant increase in unlawful access to sensitive data through new dark web sales markets. The severity of cyber loss also increased significantly with notable attacks on “Change Healthcare” and “Crowd Strike”. Both events led to extensive first party and third-party cyber risk exposures globally. The cyber insurance market has responded to recent market challenges through rate increases and heightened underwriting controls. Thankfully, the cyber insurance market has steadily matured in recent years which should decrease the odds of any extreme market volatility. At McConkey we are focused on assisting insureds with best-in-class cyber security practices and leveraging them with our cyber insurance carrier partners.
General Liability and Auto Liability – Market Challenges Continue
General Liability and Auto Liability have remained a struggle for most insureds. Loss severity and frequency remain inflated due to the highly litigious nature of society. The cost to defend insureds continues to grow as naming business in suits has become common practice. Loss severity is even more of a concern as nuclear settlements continue to be levied against insureds nationwide. In response, carriers have implemented consistent moderate increase year over year due to a heightened focus on overall rate adequacy. McConkey is committed to combating these market trends through our access and expertise in group captives, specialized claims kits, and in-house claims resources.
Excess Liability – Nuclear Verdicts Influencing Capacity and Pricing
By nature, the Excess market has mirrored the loss cost struggles we’ve seen on the General Liability and Auto lines. Carrier capacity continues to be reduced while rates continue to increase to accommodate heightened reinsurance costs. Operations with large auto fleets have become less appealing in the market, leading to increased attachment points. Traditionally, the lower attachment points experience the most pricing impact at renewal. While this still holds true, the pressure of nuclear verdicts has increased pricing implications in the mid-to-high layers of insureds excess towers. As we monitor these developments, we will continue to utilize our broad market access allowing us to minimize the impact on our clients by leveraging our carrier relationships to negotiate the most favorable terms possible.
As the commercial insurance landscape continues to evolve, staying informed on emerging market trends is essential for businesses to navigate challenges and seize opportunities. At McConkey, we are dedicated to providing our clients with the insights and expertise needed to make strategic decisions. By keeping a close eye on these trends, we ensure that our clients are always positioned to succeed in a dynamic market. If you’re looking to better understand how these trends could impact your business, we’re here to help you chart the best course forward