Marketplace Realities 2018: International casualty

November 6, 2017

    The one thing

    A highly competitive marketplace offers the perfect opportunity for buyers to customize their programs.
  • Although rate reductions are slowing, new entrants into the international casualty segment are still driving innovation and downward pressure on prices. This is the time to evaluate expiring program structures, limits, terms, services and pricing and to question the status quo. Certain structures are making a resurgence, including use of captives, ART, matching deductibles and retentions. To obtain best results, a marketing exercise, combined with an analysis of losses and your risk tolerance, may well be necessary, but expanding coverage with incumbent markets can also be an effective strategy.
  • Insurers are often willing to modify new technology exclusions, reduce pricing, provide multiyear policies and broaden local policy coverages with the addition of:
    • Excess employer’s liability (including commuting to/from work and war and terrorism buybacks)
    • Sudden & accidental pollution
    • Tenant’s liability
    • Auto physical damage
    • Manufacturer’s E&O, extended products
  • Price prediction

    Foreign casualty
    -5 to -10%;

    Flat to -5%
  • Insureds are more aware of duty-of-care responsibilities, as the intersection of risk and HR/benefits blurs. Buyers can look to maximize employee protection globally by combining coverage for foreign voluntary WC (FVWC), kidnap, travel assistance, benefits and other lines. Clients should consider expanding their FVWC policy with political evacuation, crisis response, war and terrorism and accidental death and dismemberment coverages.
  • Interconnected societies, rising personal injury claims, auto and workers compensation/ employer’s liability claims, global polarization, aging workforces and technological advances continue to create uncertainty and push insurers to seek increases and clarify coverages.
  • Other factors driving the market include:
    • Regulatory changes, protectionism, sanctions, Brexit
    • Increasing concern for privacy (Australia, U.K., E.U.)
    • Stricter compliance requirements (cash before coverage, premium taxes, tariffs) in Brazil, Mexico, Africa, U.K. India, Malaysia and Korea
    • Protection and safety of employees who travel or who reside abroad, in light of continued conflict in the Middle East and threats from North Korea
  • Brexit will affect global programs issuing freedom of services (FOS) policies. Insurers are relocating the issuance of FOS policies to the European continent — primarily Luxembourg, Belgium and France.
  • For middle-market clients, capacity is abundant. Minimum premiums for local policies can be reduced to as low as $1,500.
  • Higher liability limits are increasingly available locally for D&O, stock throughput/marine, WC/EL, professional, cyber.
  • For DBA, continued focus on safety, loss control and claim management is a best practice.