State of the Insurance Market Report

2025 Initial Outlook and 2024 Wrap-Up

Entertainment Insurance

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The entertainment industry continues to stay strong with event, production, and live performance venue attendance at (and in certain cases surpassing) pre-COVID-19 levels. Limited markets and capacity remain an issue for the industry. However, new carriers are expected to enter the film and advertising space in early 2025, which should have a positive impact on the market.

Advertising and commercial production activity continues at a strong pace. Even in the face of a continued firm insurance premium market, there’s been an increase in content production activity over the last twelve months. We do not expect a meaningful slowdown in production activity in 2025. The increase in ad-supported viewer penetration among streaming providers should bolster that assessment.

The initial rate volatility post-pandemic has now plateaued. Apart from some deterioration of profitability on the liability books, which could impact pricing on the general liability, auto, and umbrella lines of coverage, we do not anticipate appreciable rate or coverage changes for film and advertising/commercial production over the next six months. The market for theatrical production and venues remains firm and continued underwriting rigidity and conservative pricing will likely occur for the foreseeable future.

Market Conditions

In 2024, insurers continued their disciplined and focused underwriting. They remain concerned about social inflation (including higher litigation expenses and nuclear verdicts), geopolitical instability, and the effects of general inflation on the global economy. We expect this trend to continue into 2025.

  • Broadway show production budgets continue to rise, which has led to increased premiums for certain lines of coverage.
  • The insurance marketplace for commercial production remains limited, and carriers continue to be disciplined on underwriting and profitability. Barring an unforeseen industry-wide claims scenario, macro-level exposure issues, or serious new carriers, we do not anticipate significant changes from the current rate environment. Carriers are looking to shore up policy terms and conditions and address deductibles or retentions, where necessary, on loss-driven accounts.
  • Umbrella capacity remains limited with high limits remaining difficult to obtain for Broadway and theatrical tours. For other classes of live performances and venues, rates continue to rise about 7.5% to 10%.
  • Many performing arts venues have embarked on significant renovation projects in theaters. Construction on these facilities remains challenging and can impact premium. Contract reviews are vital to ensure proper wording. Make sure insurance requirements and indemnification clauses are in place.
  • While the events space has improved, it has not moved into a soft market.
  • Some new capacity for events and live performances is attempting to come into the marketplace, offering somewhat more competitive rates on certain risks. If the new capacity is successful in gaining traction with businesses, rate increases could potentially level off or come down slightly in 2024.

Coverage Considerations

  • Though COVID-19 restrictions have eased, all insurance policies continue to exclude this risk.
  • Rates seem to have flattened for standard productions, but underwriting has become more stringent for audience participation/immersive productions and shows that contain higher-risk activities like strenuous choreography.
  • Specialty coverage (production, event cancellation, etc.) rates for film, TV, and contingency businesses have remained relatively stable. However, insurers are focusing on profitability and strict underwriting, most notably for performance disruption, non-appearance, and weather-prone cancellation risks.
  • Licensing contracts with venues continues to be more challenging, with requirements for shows to carry additional coverage and potentially higher limits (which mean increased premiums).
  • For theater owners, the premiums associated with construction and renovation projects have risen significantly for larger jobs where the incumbent carrier is unwilling to roll the coverage into the existing program. We anticipate this trend will continue due to limited capacity.
  • Live performances still see significant challenges in primary general liability and excess. New market appetite may result in an opportunity for accounts to be marketed, leading to price/coverage enhancements.
  • In liability, carrier loss ratios have deteriorated due to claims frequency and severity. As a result, the market remains tough, with large premium increases. We are aware of key carriers reserving significant (eight-figure) losses in this coverage sector.
  • The venue marketplace has not faced the same challenges. However, rates depend highly on the type of event, size, and the loss experience of the individual client. For some types of events, market capacity and terms have not returned to pre-pandemic levels.
Entertainment Rate Forecast
Film/TV:   Flat to +5%
Broadway/Theater:   Flat to +5%

Recommendations

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Navigate the current insurance landscape by aligning with an experienced specialty broker who is familiar with entertainment insurance and can adequately assess your coverage needs.

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Start your renewals promptly and well in advance of your policy renewal date.

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Maintain strong lines of communication and information sharing.

Entertainment-Recommendations-SOTM-2024
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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.