Skip to main content
Survey Report

Insurance Marketplace Realities 2021 Spring Update – International Casualty


April 21, 2021

The market for international casualty has continues to see significant impact from recent social and economic trends.
Rate predictions
  Trend Range
Overall: Increase (Purple triangle pointing up) +7% to +10%

Key takeaway

The international casualty market continues to be impacted by recent social and economic trends, with results varying widely based on individual account risk factors and market competition.

Social and economic instability in recent months has permeated international casualty despite healthy capacity and very few claims linked directly to COVID-19. Overall, capacity remains available, primarily from the established markets, who can write multiple global lines.

  • Renewal results vary widely from risk to risk, with some insureds still renewing with flat rates or even some rate reductions, while most are seeing single and low double-digit rate increases.
  • Insureds who have experienced significant claims and those with higher-risk exposures are the most vulnerable in this evolving marketplace. We recommend that these insureds initiate renewal discussions early and explore all possible options.
  • To achieve the best results, buyers should:
    • Deliver clear and consistent underwriting data and related documentation
    • Leverage their purchasing with strategic carrier relationships
    • Demonstrate that they have communicated detailed risk management protocols to their various stakeholders
    • Partner with their broker, carriers and internal teams to take a disciplined approach to the renewal timelines, allowing for a thorough review of localized coverages and claim handling plans
  • With many businesses reporting a decrease in revenues, the resulting reduction in exposure may not mean a 1:1 reduction in premium. Global program administration costs are somewhat inelastic and are a significant portion of the total program costs, so insureds may face rate increases as their exposures drop.
  • As organizations measure the quality of their global programs, we recommend taking a holistic approach and placing value on issues beyond price, such as the delivery of information and service. The most effective carrier partners are those who deliver accurate and timely policy documents, quality post-binding services around the world, and offer an insured the ability to influence localized policy coverage terms.

Capacity remains available, despite outside pressures.

  • The ongoing impact of the global economic downturn caused by COVID-19 is uncertain, but we anticipate a continuation of low interest rates, which will impact carrier investments and suppress overall carrier profitability. Other P&C lines will continue to push for rate increases, which influences underwriters of international programs to follow suit and raise rates.
  • In 2020, upward pressure on rate was mitigated by growing capacity. However, most carriers have become less aggressive, choosing rather to stabilize their capacity rather than continuing to expand.
  • Underwriters are seeking clear and consistent exposure information from insureds, limiting or even removing the ability to obtain coverage for “if-any” exposures, as well as excess difference-in-condition (DIC) coverage, without clear details about the primary coverage in local geographies.
  • On a positive note, carriers that write global lines of coverage are often able to partner with insureds on other lines, offering the opportunity to reduce overall cost through economies of scale.
  • Multiyear agreements are available in some instances and can offer coverage and rate certainty as well as relieving the administrative burden of annual renewal negotiations.
  • For certain insureds with large and complex international risks, European-based insurers can offer an alternative access point with potential benefits:
    • Customarily higher primary limits and expanded coverage territory
    • Sizable limits on unique coverages, such as pure financial loss and extended products liability
    • Key coverage extensions included in the master policy, enabling broader coverage territory

Achieving optimal overall price includes a discussion of umbrella attachment points.

  • Buyers need to review how international casualty would best attach to the excess and umbrella (i.e., retained limit versus underlying limits) as well as the attachment point itself. These factors can impact overall cost and drive optimal claim handling.
  • With many international casualty programs charging lower rates than the primary umbrella, pushing up attachment points may offer considerable opportunities.

Combining P&C coverage into packages with international casualty may have strategic advantages, but buyers need to be aware of the impact the hard property market may have on the combined program including potentially raising rates even if the casualty exposures are relatively small.

  • Catastrophe limits continue to be under pressure, requiring more underwriting scrutiny and higher premiums and larger deductibles.
  • Buyers can take steps to minimize these negative pressures:
    • Deliver clear and consistent underwriting data
    • Leverage position with strategic carrier relationships
    • Demonstrate that strong loss controls are in place and there is resolve to improve the company’s risk profile

Requests for more underwriting data as a result of COVID-19 adds pressure to renewal timelines.

  • Expect questions about how your organization is protecting staff and customers from the pandemic.
  • The foreign voluntary workers compensation (FVWC) component of international casualty remains the most significant target for coverage discussion around COVID-19. This coverage commonly extends to endemic disease with state-of-hire workers compensation benefits for employees who are working outside of their home countries. However, for coverage to apply, their travel needs to be in the course of business.
  • Coverage may also be triggered in a business travel accident policy for someone who contracts the virus while traveling on business.

Life after Brexit requires attention to local policy administration.

  • Carriers and brokers have long been preparing for Brexit by repositioning certain underwriting and/or service functions (e.g., freedom of service [FOS] infrastructure) to alternative European locations (e.g., Luxembourg, Ireland, Spain and Belgium).
  • As a general note, we strongly encourage insureds to partner with their broker and carrier to weigh the pros and cons of an FOS structure as the primary source of coverage for a casualty program. The benefits that are generally available on a property program are often less clear for casualty. Programs that replace local policies throughout Europe with an FOS policy may reduce costs, but may also lose broad, country-specific terms that are only available in certain countries.
  • In the past, some insureds may have received an FOS policy from a carrier’s U.K. office, representing coverage for the U.K. As many carriers need to transfer those FOS responsibilities out of the U.K., insureds should consider requesting a separate local U.K. policy at renewal.
  • When a renewal involves a potential change regarding where an FOS policy will be issued, we suggest carefully considering the governing laws of that policy. For example, the U.K. relies on common law whereas other European countries rely on civil law, and there will be differences in how claims are managed.

Changes in market regulation and issues of compliance are crucial.

  • State-driven regulation and rising protectionism continue to impact the marketplace. Federal agencies in some regions are requiring participation of in-country insurance capacity in global programs, which impacts pricing, exportability, control and renewal timing. Buyers should be aware that any restrictions on the exportability of risk and premium will limit the corresponding amount of underwriting and claim settlement authority that can be centralized.
  • Enforcement of premium payment warranties (e.g., cash before cover) is quite active in some countries, which should encourage buyers and their brokers to be ready to bind 30+ days in advance of renewal.
  • Insurance and tax audits, as well as requirements for insureds to provide know-your-client (KYC) documentation, are evidence that local regulators are actively seeking to ensure that programs are locally compliant.

Alternative risk programs that include fronted local policies offer notable advantages and are likely to become attractive as risk transfer rates increase.

  • While the marketplace for fully fronted programs remains fairly limited, they can be popular for insureds who wish to control cost allocations and centralize coverage documentation. If risk transfer pricing continues to rise, we expect more insureds will consider various forms of alternative risk transfer, including the use of captives.
  • Carriers that write programs with significant retentions are often well-established and have the underwriting expertise, global network, technology and cash flow capabilities to handle these programs effectively.
  • Programs with a reinsured retention generate administration costs and often require collateral. The calculation of administrative costs and collateral depends on several factors, including the number of local policies, volume of claims, limits issued, etc. Upward pressure on those costs can be mitigated in certain cases by leveraging a carrier relationship across other products.

Program administration remains an important focus.

  • In a marketplace that does not generally see the same claim frequency or severity as U.S. domestic lines, multinational programs often incur more administration costs from carriers, brokers and insureds. As a result, all parties should look for ways to drive value through efficiencies.
  • The key to achieving a program that delivers value is a disciplined approach to renewal timelines, with teams beginning the renewal process early and documenting clear objectives upfront.
  • International casualty programs require significant administration and collaboration. Rather than differentiate purely through price, carriers and brokers are creating and/or enhancing operational tools, leveraging technology and offering underwriting flexibility and/or enhanced transparency around country-specific coverages.
  • Premium allocations require a defensible and consistent methodology. Insureds and brokers should initiate these discussions early in the renewal timeline, with consideration of such issues as taxes and premium/risk exportability.
  • Several carriers supplement the delivery of international programs with online platforms. The ability to reduce friction and improve clarity continues to be a differentiator; therefore, carriers continue to invest in tools that offer transparency into network instructions, posting of policy documents and other improvements in efficiency.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. 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 advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.

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.


Director of Operations,
Global Services and Solutions
Corporate Risk and Broking

Related content tags, list of links Survey Report Casualty Insurance United States
Contact Us