State of the Insurance Market Report

Key macro factors driving market conditions in 2024 and expected to continue into 2025 include:

• Regulatory environment: Insurance regulators’ primary responsibility is to protect consumers. Carriers that cannot obtain adequate rates to remain viable in any given market often restrict new business, making it challenging for property owners to access appropriate insurance protection or choice in the marketplace. Some carriers are not writing any new business in Florida, California, or other states because of the current regulatory environment. Some states have passed new legislation that will ease some of the stress on carriers, allowing them to take more adequate rate adjustments in the admitted market and reprice risks.
• Reinsurance: The mid-year 2024 reinsurance renewals saw some positive rate adjustments and term improvements, however uncertainty around the January 1, 2025, renewals remain on the horizon and will be highly correlated with the year end 2024 CAT statistics.
• Excess & Surplus Lines (E&S): Non-admitted insurance carriers, also referred to as excess and surplus (E&S) lines carriers, represent one of the fastest growing segments of the insurance industry. Non-admitted carriers are not subject to many of the same regulatory requirements as those that are writing business on an admitted basis. E&S, which is often the only solution for clients in some CAT-prone areas, can address specific coverage circumstances, and aligns well with clients with higher risk tolerance.
• Catastrophe events: According to the National Oceanic and Atmospheric Administration NOAA National Centers for Environmental Information (NCEI), as of August of 2024 there were 19 confirmed weather/climate disaster events with losses exceeding $1B each in the U.S. Comparing this data to prior years, we see a significant increase in severe storm activity. The annual average for 1980 to 2023 was 8.5 events (CPI-adjusted); the annual average for the most recent five years (2019–2023) was 20 events (CPI-adjusted). In addition to the impact of severe weather events themselves, natural disasters directly impact the availability and cost of building materials, fuel, and labor supplies needed to rebuild and repair damaged property.

Severe Weather Risks & Risk Mitigation Recommendations: HNW families and individuals tend to own properties in some of the most risk-prone locations and states. An annual review of exposures, risk tolerance, and coverages is a critical aspect of risk management, especially as it pertains to the threat of severe weather events.

• Flood Risks: Flooding is by far the most common, costly, and destructive natural disaster in the U.S., causing billions in economic losses each year. According to the Federal Emergency Management Agency (FEMA), flooding causes 90% of disaster damage every year. Everyone is at risk for flood damage, regardless of location. Given the increasing prevalence and risk of flooding, homeowners should take a fresh look at their flood risks and consider how flood insurance can be incorporated into their overall risk management and insurance strategy.
• Wildfire Risks: Wildfires in the U.S. have grown larger, more frequent, and more destructive in recent years. According to research from Pew Charitable Trusts, from 2017 to 2021, the average annual acreage burned by wildfire in the U.S. was 68% greater than the yearly average from 1983 to 2016. The increased risk of wildfire is spreading across the country, all the way to the East Coast and into humid regions like Florida and Hawaii. Creating defensible space and hardening your home through strategic, proven tactics are crucial to safeguarding homes from destruction and can help make your property more attractive to insurance underwriters.

• Hurricane Risks: The 2024 hurricane season, which runs from June 1st to November 30th, was predicted to be intense from the start. While there was some reduction in the total number of named storms in the August updates by NOAA and other forecasting sources, the forecasts continued to indicate an “extremely active” and strong hurricane season. Hurricane Beryl, the strongest July Atlantic hurricane on record, made a record-breaking three landfalls and strengthened into the earliest Category 5 storm in the Atlantic on record. Hurricane Helene, which struck the Panhandle of Florida in late September as a Category 4 storm, produced record storm surge, extreme flooding, and widespread destruction. Early planning and proactive actions are the best way to reduce risks, make homes more resilient, enable safer evacuations, and facilitate quicker post-storm recovery.

Clients not only have properties in risk-prone locations, but they also have assets and passions that require complex insurance solutions. Throughout 2024 we have seen challenges and market changes in many of these specialty personal insurance segments, and we focus on helping our clients face these challenges with the insurance protection and risk management strategies they need to protect their lifestyle.

• Fine Art & Collections Insurance: Fine art underwriters require more frequent appraisals for the most generous valuation clauses. Climate change has created noteworthy challenges for people seeking fine art insurance. Hurricane seasons have become longer and more intense. Wildfires and flooding, byproducts of climate change, are affecting broader swaths of the U.S. Even areas not historically prone to natural disasters are seeing an uptick in storm-related claims to fine arts and collections. To create the best possible outcomes for your fine art collection, planning ahead is imperative.
• Private Aviation Insurance & Fractional Ownership: Aviation and aircraft insurance capacity is slowly returning with the addition of new insurers in 2023 and 2024. However, appetite continues to be affected by the diverse nature of operations, increasingly costly claim settlements, and strict pilot standards extending to both the primary and second-in-command pilot. Understanding the risks and insurance solutions for private and fractional aviation owners is essential.
• Yacht Insurance: The increase in demand for yacht policies, along with year after year of record-breaking climate-related disasters and frequent severe weather events, continue to put substantial pressure on an already competitive, restricted marine insurance market. Advanced technologies that are integrated into marine construction, materials, rigging systems, and onboard electronics have created new and ongoing challenges and complexities for underwriters. Marine insurance capacity from the carriers continues to be limited across the nation, especially in areas vulnerable to increased hurricane and severe weather activity such as Florida, Texas, the Gulf States, and California.

Private Client Services Rate Forecast
Property:		+10% to +50%
Excess Liability:		+10% or more
Personal Auto:		+12% to +15%
Marine/Yachts:		+10% to +25%