Automobile

Moderate market conditions continued. While price increases remained modest, the transition in some parts of the country to Direct Compensation for Property Damage (DCPD) led to continued pricing conservatism as subrogation of no-fault losses is no longer permitted. Capacity remained sufficient and insurers were eager to write new business. Underwriting remained prudent with a focus on safety controls, driver training and driver selection. Insurers sought to package coverages which brought greater flexibility in pricing and overall negotiations. Looking ahead, a moderate to slight softening is expected.

Casualty/Liability

Competition on Primary programs varied; large global risks experienced healthier appetite and more competition than smaller, domestic risks. Pricing was flat to modestly up. The Excess market experienced more competition, and price reductions could be achieved as insurers sought to achieve aggressive growth targets. Insurers remained selective on where to deploy capacity, which has not returned to pre-COVID levels. Appetite for Excess layers improved, but at lower attachments than in prior quarters. Ventilation opportunities created additional capacity. Underwriters continued to require detailed and complete information, which reduced follow up queries. PFAS exclusions continued to be mandated. Some risks with significant wildfire exposure experienced a reduction in sub-limits or, in severe cases, exclusion of coverage. Looking ahead, insurers are expected to become more growth focused; however, they will likely remain selective with little change in appetite. Large global risks are expected to experience more competition on Primary, as premium and deductible levels are deemed within insurer targets.

Cyber

Market conditions continued to moderate. Insurer confidence returned and where insureds were able to demonstrate strong critical cyber security controls, competition was fostered, resulting in a stable to decelerating rate environment. Risks with control gaps, losses in the last 3-5 years or which are operating in a high-risk industry experienced a more challenging pricing environment. New entrants – both local and global insurers – served to increase capacity in both Excess and Primary programs. Insurers also expanded their limits deployed on a single risk. Underwriting remained rigorous; a base application and supplemental ransomware questionnaire were required for most risks. In addition, other supplementals to gather information about emerging risks such as meta pixel exposure and new zero-day vulnerabilities were leveraged as underwriters deemed necessary. Insureds were required to demonstrate strong responses to areas of questioning or risk being denied or receiving subpar terms and conditions. Even when competition drove down pricing; deductibles remained generally stable. Minimum retention requirements based on revenue bands that had been established by insurers continued. Coverage restrictions were imposed for War (clarifying coverage for state sponsored attacks), Infrastructure (clarifying coverage for events resulting from outages of modern-day infrastructure) and Catastrophic losses (applying sub-limits for widespread losses). Looking ahead, market conditions are expected to remain moderate. Insurer optimism and confidence will cautiously increase, barring any significant cyber events.

Directors and Officers

The market transition that began in mid-2022 continued – and accelerated for some risks – and conditions became increasingly favorable. Pricing varied based on risk type, with private and not-for-profit risks hovering around flat for Primary and trending upward for Excess. Public companies experienced price decreases on Primary and Excess, with Excess layers seeing the most significant downward trend. Capacity was abundant for most risks, as new insurers entered the market and established insurers increased their deployment. Key underwriting themes continued from prior quarters: ESG and financial strength dominated discussions, and economic uncertainty brought greater focus on debt and EPL. Some coverage restrictions imposed during the hard market environment were reconsidered. Looking ahead, current market conditions are expected to continue.