Report
Q3 2024 Commercial Insurance Market: Some Good News and Some Challenges
Carolyn Polikoff
Dec 03, 2024
The good news for insurance buyers is that the North Atlantic Hurricane season has not significantly impacted property rates or coverage, and rates are continuing to decrease—a trend we noted in our last update.
Insurance buyers can expect decreases across most lines of commercial insurance, including D&O, cyber, workers' compensation, and property if there isn't a major catastrophic exposure. The only segments of the insurance market that remain challenging are auto and excess casualty.
In our Q3 2024 Commercial Lines Insurance Market Update, we review and assess current trends across various segments. Here are the highlights of the report.
D&O: Competition Continues to Drive Down Rates
With an oversupply of insurance capacity and only a modest number of 2024 IPOs, insurers are still competing for public D&O renewal business, driving rates and retentions down for most companies.
Even though there has been an uptick in IPO activity in 2024, many companies have taken a wait-and-see approach, deferring their public debuts to next year. Still, going public in 2025 will come with challenges, such as regulatory scrutiny, litigation risks, and changing economic conditions.
The likelihood of a public company being sued through Q3 2024 was 16% higher than it was last year. Litigation is being driven by new and increased exposures, including cyber; privacy oversight; derivative, bankruptcy, and regulatory concerns; environmental, social, and governance (ESG) issues; and COVID-19.
Property: Profitability Overshadows Losses
Each month produces better results than the last, with new capacity driving competition in the property market. While 2024 has been an active year for catastrophes, profitability and the desire to grow have overshadowed losses for carriers.
This year’s North Atlantic hurricane season did not significantly impact rates or coverage. Most property carriers remained profitable through the first 10 months of the year, resulting in expanded lines on programs and expanded appetites.
Casualty: Challenges Continue Despite Some Positive Signs
The casualty market remains challenging despite positive signs for certain lines of coverage. Auto, general liability (GL), and lead umbrella markets continue to experience rate increases due to adverse loss trends.
Workers’ compensation has been consistently profitable due to high interest rates and insurer investment income. However, wage and medical inflation, the 24/7 exposure of remote work, and an increase in claim frequency with a return to offices may impact rates over time.
We also are seeing large verdicts and liability settlements continuing to impact the market as carriers experience adverse developments on historical claims.
Cyber: Systemic Events Pushing Losses
Recent systemic attacks (CrowdStrike, Change Healthcare, and the CDK outage) are causing insurance carriers to hold the line on pricing. However, competition between carriers continues to drive small rate decreases and lower premiums.
The level of underwriting scrutiny can vary significantly across different insurers but remains high, and coverage restrictions remain for some.
For more insights into the insurance trends and pricing changes of Q3 2024, download our full report here.
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