Interest rates continue to drive strong investment income for insurers. Nevertheless, the effects of social and economic inflation continue to accumulate, adding pressure to insurers’ liability reserves and pricing. How much this impacts 2024 remains to be seen, but additional scrutiny around risk selection and program structure is expected. In this dynamic environment, tailored analytics and creative program design are now table stakes for insurance buyers.
Competition Continues but Risks Linger
Rising investment income, a growing economy and a (thus far) relatively mild 2024 wind season have helped keep commercial insurance market conditions largely favorable to buyers. Despite this, there is still an underlying sense of fragility in both the economy and the insurance marketplace. Any large, unexpected event could bring an end to the stable and predictable market that many buyers currently enjoy. This environment has sparked interest in alternative risk strategies, which can offer significant value for organizations seeking to more effectively manage costs and volatility. For buyers, it’s essential to continue to challenge existing thinking, rather than simply renewing insurance programs as is. Now is the time to revisit past assumptions, reexamine limit adequacy, and capitalize on safety and risk mitigation investments.