State of the Insurance Market Report

2024 Initial Outlook:
Entertainment Insurance

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As the world has emerged from the pandemic, the entertainment industry has surged, with event and live performance venue attendance at pre-COVID-19 levels. Despite this resurgence, the insurance market continues to be challenging from a rate and underwriting perspective. Limited markets and capacity have led to a market dynamic that hasn’t improved as we anticipated a year ago. The new capacity we mentioned in Q1-2023 has struggled to gain traction.

The Writers Guild of America (WGA) and Screen Actors Guild (SAG-AFTRA) strikes led to the universal stoppage of most film and TV productions. With the end of both the WGA strike on September 27 and the actors’ strike on November 9, Risk Strategies foresees an extremely active 2024.

Advertising and commercial production activity continues its robust emergence from the pandemic. Even in the face of a continued firm insurance market, there’s been a noticeable increase in the number of productions over the last 18-24 months. The WGA/SAG-AFTRA strikes that affected TV and film did not impact advertising and commercials, which assisted the continued activity in this sector. We do not foresee a meaningful slowdown in production activity in 2024.

At this point, we do not anticipate appreciable rate or coverage changes in the next six months.

Market Updates

In 2023, insurers continued their disciplined and focused underwriting. They remain concerned about social inflation, geopolitical instability, and the effects of general inflation on the global economy.

  • Most countries and cities have relaxed or eliminated COVID-19-related restrictions, allowing for more activity in the live performance space. Unfortunately, live performances face a difficult time, as insurance markets are limited. Insurers have scaled back coverages and previously available limits (compared to 2022).
  • Broadway show production budgets are on the 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 a significant change from the current rate environment. Carriers are looking to shore up policy terms and conditions and addressing deductibles or retentions, where necessary, on loss-driven accounts.

Wide angle view of theater interior

  • Umbrella pricing has leveled off but remains higher than pre-COVID-19 pricing 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, resulting in higher premiums. 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.

2025 State of the Insurance Market: Initial Outlook and 2024 Wrap-Up

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.
Rate Forecast
Film/TV: Flat to +5%
Broadway/Theater: Flat to +5%
  • Licensing contracts with venues continue 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, on the whole, are still seeing fairly significant challenges in primary general liability and excess.
  • In auto liability, carrier loss ratios have deteriorated due to claims frequency and severity. As a result, the market remains tough, with large premium increases.
  • 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.

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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.