Commercial insurance market conditions favor buyers across most lines of coverage. Still, a sense of fragility in both the economy and the insurance marketplace looms over the industry, according to the latest edition of the Lockton Market Update. 

The quarterly report published by Lockton, the world's largest privately held independent insurance broker, delivers timely and relevant market insights for commercial insurance buyers. The September Lockton Market Update spotlights U.S. economic conditions, post-election priorities to watch, emerging risks, and strategies for effective crisis management planning and incident response.

"We're seeing generally favorable market conditions, some of the best we have seen in the last five years, and with insurers reporting strong profits, there's reason for continued optimism," said Mark Moitoso, Lockton's Risk Practices Leader. "However, a large, unexpected event could end this stable and predictable market, so it's critical to be mindful of the uncertainty ahead when evaluating your insurance program."

Despite overall favorable conditions, liability remains a significant exception. Loss costs continue to rise across virtually all liability lines. Even as rates climb, however, conditions are generally predictable for buyers.

This environment has sparked renewed interest in alternative risk strategies. The report details how alternative risk products are becoming a key component of many risk financing programs and can offer significant value for organizations seeking to manage costs and volatility more effectively.

Key takeaways from the report:

• Insurers are closely watching the economy and geopolitical landscape.
• Property conditions continue to improve, to the benefit of buyers.
• Workers' compensation remains competitive, while reserve redundancies help offset pressure in third-party liability.
• As social inflation continues to impact attachments, limits, and rates across third-party liability lines, insurers are carefully watching loss trends and reserve adequacy.
• Strong capacity continues to fuel a buyer-friendly directors and officers liability (D&O) market, especially public companies.
• Cyber pricing continues to decline, even as concerns grow about accumulating losses.

"The commercial insurance market is much like a living organism – constantly evolving in response to the experiences of insurers," Moitoso said. "By staying informed of market shaping trends and emerging risks, businesses can make smarter decisions, implement more effective risk management strategies, and better protect their people, operations and finances."

Explore the September 2024 Lockton Market Update now for more market insights and recommendations for insurance buyers.