State of the Insurance Market:
2025 Outlook

International

The London property and cargo/stock throughput markets are experiencing heightened competition driven by aggressive growth targets, increased stamp capacity, and an influx of new market entrants.

Rates have seen reductions of around 5%, with some insureds achieving greater decreases by leveraging new capacity to create a more competitive process. This shift has disrupted the U.S. surplus lines market, as London capacity increasingly replaces domestic options, especially for accounts previously facing substantial price increases. These conditions, combined with expanded follow facilities, have established a more efficient market environment, particularly beneficial for insureds.

Market Conditions

 

The London property market has benefited from more aggressive growth targets for existing syndicates, as well as an influx of new capacity into the market. The past several years of manageable CAT losses, rate adequacy, and profitability have led to a more bullish outlook throughout the market. Managing General Agents (MGAs) are adding to this momentum based on their view that it’s the right time to get aggressive in the market and carve out market share. Rate reductions are in the –5% range, with some insureds seeing more significant decreases by leveraging new capacity to create a more competitive process.

The increased market capacity is also driven by automatic follow facilities, which attach to and augment lead lines from traditional syndicates and markets. Some of these facilities are available in the open market, while select London brokers are expanding their proprietary, in-house follow facilities. The net effect is a more efficient process of filling out programs.

London markets have also begun to compete on smaller U.S. programs, where their cost of capacity was previously too high, to compete with U.S. insurers. This shift in strategy has had a significant impact on the U.S. surplus lines market, with London capacity supplanting domestic capacity in many cases. The influx of these new London markets has created a hypercompetitive rate environment for many accounts who experienced the most dramatic price increases over the past few years.

Competition in the London property and cargo/stock throughput market is also intense, driven by factors similar to the property market. Existing syndicates have increased stamp capacity, as well as substantially higher growth objectives. These factors, combined with new market entrants, create an extremely favorable market for insureds.

Recommendations

 
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Engage with a broker who understands the complexities of international insurance markets.

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Start the renewal process early, sending underwriting submissions out at least 90-120 days before the renewal date.

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Identify clear objectives for each program’s renewal, so that marketing efforts can be focused and efficient. This includes reevaluating program limits and retentions to best align with improved market conditions.

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Complete outstanding risk control recommendations that are reasonable and achievable, highlight internal risk management programs that distinguish clients as best-in-class, and provide updates and estimated timelines for the completion of unfinished risk control recommendations.

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The contents of this report are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.