U.S. Commercial Insurance Market Becoming More Predictable, but Challenges Remain: Lockton Market Update

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Jun 27, 2024, 08:00 ET

KANSAS CITY, Mo., June 27, 2024 /PRNewswire/ -- Commercial insurers are increasingly competing for business across a number of major lines, helping to fuel stability and more predictable outcomes at renewal for U.S. insurance buyers, according to the latest edition of the Lockton Market Update.

The quarterly report published by Lockton, the world's largest privately held independent insurance broker, covers trends and conditions in the commercial property and casualty market in the U.S. to help businesses make more informed decisions about their insurance programs. The June Lockton Market Update highlights changes in the overall U.S. economic and geopolitical outlook, the dramatic shift in the property marketplace after a five-year hard market, and conditions in the marine insurance market following the collapse of Baltimore's Francis Scott Key Bridge.

"Three months ago, we anticipated a shift in the P&C insurance marketplace toward greater competition. We're now seeing these conditions materialize for commercial insurance buyers," said Mark Moitoso, Lockton's Risk Practices Leader. "The property market is stabilizing, liability pricing continues to increase but becoming more predictable, and we're seeing favorable conditions in workers' compensation, directors and officers liability, and cyber insurance."

While carriers' current financial performance has been positive, the report details what challenges remain. Climate change represents a long-term threat for property insurers, and new data suggests that social inflation – the dramatic increase in the size of claim settlements and verdicts in civil litigation – is not going away.

Key takeaways from the report:

Although rates still rose in the first quarter, the property insurance market is rapidly becoming more buyer-friendly.
Workers' compensation remains highly profitable to insurers, which has buyers benefiting from competitive rates.
Liability rates continue to climb but results have become more predictable for most buyers.
Pricing for key financial and professional lines, including directors and officers liability (D&O) and cyber, continues to fall.

Against this backdrop, buyers should continue to challenge their thinking on P&C insurance programs. The report highlights six strategies to consider for the remainder of 2024, including reassessing risk tolerance, exploring alternative risk solutions, and building relationships with insurers to achieve positive outcomes.

"It's essential for business leaders to understand the shifting risk management landscape," said Moitoso. "The Lockton Market Update aims to equip business leaders with the latest intelligence on what's happening in the insurance marketplace, so they can get the best possible outcomes."

Access the full report here and follow Lockton on LinkedIn for the latest research insights.

About Lockton

What makes Lockton stand apart is also what makes us better: independence. Lockton's private ownership empowers its 11,700+ Associates doing business in over 140 countries to focus solely on clients' risk, insurance and people needs. With expertise that reaches around the globe, Lockton delivers the deep understanding needed to accomplish remarkable results. For more information, visit www.lockton.com.

SOURCE Lockton