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Insurance company market update

BPL Insurance Market: Q2 2020 Update


By Kevin Kirby | October 5, 2020

ICPL insurance market highlights; including a focus on cost, markets, targeted segments, capacity, coverage, and COVID-19 impact.
Cost and retentions
  • Pricing: Premium increases are accelerating, with favorable accounts subject to rate increases of 5-30%.
    • Those insureds with poor claims experience and/or more challenging risk profiles can expect increases of 30%+.
  • Retentions: Renewed pressure is being applied to increase retentions in line with unprecedented uncertainty, legal fees and settlements.
    • If available, sales and marketing coverage for life insurers typically requires a split retention which can be multiples of the base level.
  • Appetite for primary ICPL is increasingly limited with little to no competition available for large and complex risks.
  • Even middle market insurers now face a marketplace with approximately 10 viable primary carriers.
  • ICPL insurers are content to attain growth targets through renewal premium increases and less likely to compete on new business.
  • The London and Bermuda markets have tepid appetite for US insurers, often limited to opportunistic or high excess attachments.
Targeted segments
  • Favorable: Subsets include mutual insurers, reinsurers and middle market insurers (less than $2bn in revenue).
  • Unfavorable: P&C (particularly with significant BI exposure), life, auto, travel and long term care insurers.
  • Greater scrutiny on insurers with substantial exposure to COVID-19 both in terms of liability and investments exposure. Along with a sharp increase in questions and information requests, carriers are now reluctant to release formal terms more than 30 days prior to renewal.
  • Carriers are applying fresh scrutiny on limit outlay and looking to cap at $5m-$10m, particularly where claim payments have been made.
  • Primary ICPL remains a loss leader for carriers, relative to other financial institutions, so packaging with opportunities on more profitable lines of coverage is necessary to drive meaningful interest.
  • While excess layers remain more competitive, several insurers have become more conservative in their minimum attachment point.
  • For P&C insurers, several carriers have introduced language designed to exclude claims arising out of the handling of COVID-related claims under future policy periods – limiting their exposure to a single aggregate limit.
  • Sales and marketing coverage for life insurers is increasingly difficult to obtain, with many markets solely affording sub-limits, higher split retentions or excluding altogether.
  • Coverage for cost of insurance litigation is extremely limited and often restricted to defense costs only.
  • Broad regulatory coverage is of paramount importance, due to the increasingly complex supervisory framework.
  • Starting in the UK and Europe, carriers have begun to address ‘silent’ cyber through the addition of clarifying language which either affirmatively grants or excludes coverage for claims related to a cyber event.
  • For middle market insurers, certain carriers have started to require that policies be written on a ‘duty to defend’ basis.
Impact of COVID-19
  • The impact of the pandemic on Insurance Company D&O and ICPL renewals is yet to be fully determined and is evolving daily.
  • Carriers are generally behaving very cautiously, with competition significantly reduced as the appetite to compete for new business has largely dissipated.
  • Allow for more time in the renewal process and expect several questions relating to both the impact of, and response to, the pandemic.


Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.

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Insurance Company Market Update – Q2 2020 PDF 2.9 MB

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