2025 Initial Outlook and 2024 Wrap-Up
Proactive risk management and strategic planning are at the core of fostering business resilience. This report features insights from insurance experts in our specialty practices and product lines who work with clients every day to stay ahead of risk.
As we advance into the last quarter of 2024 and look ahead to 2025, the insurance market presents both challenges and opportunities across various lines of coverage. We have the following key observations for the insurance landscape.
• Market Challenges: The insurance market continues to face considerable challenges in catastrophic property and auto lines, which continue to experience historic loss levels. This situation affects the availability of insurance and affordability for clients.
• Stability in Certain Lines: Despite challenges, some insurance lines such as management liability, cyber, and workers’ compensation remain stable. These areas have adequate capacity and consistent rates, particularly for organizations with effective risk management strategies in place and good risk profiles.
• Impact of Catastrophic Events and Inflation: Catastrophic weather events are significant drivers in the market, contributing to substantial losses. Additionally, inflation and rising costs, including interest rates and supply chain issues, are impacting overall insurance costs.
• Rising Medical Costs and Claims: There is an upward trend in claims costs, driven by economic factors and social inflation (including higher litigation expenses and nuclear verdicts). Employers also face rising medical expenses, which affect employee benefits programs and require more customized approaches.
RECOMMENDATIONS
There are many factors that impact risk. Exploring various options across the insurance spectrum, aligning them with business vision, and making informed, long-term decisions is essential to building a comprehensive risk management strategy that ensures business resilience. Insurance should be viewed as part of a strategic business framework, rather than a mere annual renewal process. Work with a specialty insurance broker to understand global risks and the potential impact to your business and personal assets. Ideally, you want a partner that understands your industry and risk - a broker with deep experience in the core insurance product lines, and with highly trained experts who support clients in that segment, and who has the right relationships in the marketplace to do so. This will help protect what matters most to you, positively impacting your outcomes in the near-term, while building security and stability for the future.