Amwins has explored the state of the casualty market in the first quarter of 2021, which it says shows similar trends to the end of 2020 with both attritional losses and nuclear verdicts continuing to drive pricing increases.
National Casualty Practice Leader Tom Dillon claims that the key difference in the market this year is that the new carrier entrants into the excess space have begun to temper rate increase in the traditional E&S areas of the market. This capacity has come from both London-based and domestic sources.
“The capacity we’re seeing come into the marketplace is experienced capacity. Meaning well-established, well-regarded and well-capitalised insurance executives are willing to deploy their capital in tougher spaces, such as infrastructure projects and large commercial projects,” Dillon says.
However, it will take time for the impact of this infusion to be fully felt in the marketplace, and several segments still face a capacity crunch, particularly in high excess layers.
With many accounts entering their second renewal cycle of large pricing increases, the expectation is that rates, while still climbing, will slow their steep ascent. “I believe most of our carriers are now comfortable with their current attachment point and limit deployment on individual risks. However, there may be some movement in the certain classes, especially auto-exposed risks,” says Dillon.
Hard market conditions in the casualty marketplace are expected to continue for at least several quarters, although at a diminished level compared to last year.
Dillon added: “Eventually, capacity coming into the sector will likely provide some rate relief, but the forces driving the price increases haven’t let up. Unless there is some meaningful tort reform, or until carriers gain more of a comfort level in certain segments and are able to avoid large verdicts and settlements, we will see a continuation of these challenging conditions.”
In this difficult space, access to a diverse market roster through a wholesale broker with experience and established relationships is essential to connect to available capacity.