| Trend | Range | |
|---|---|---|
| Structured programs | Downward pressure on insurer risk margins | |
| Parametric nat cat |
|
-5% to flat |
| Integrated risk programs | Limited market appetite | |
| Captive stop loss | Highly customized based on analytics |
Key takeaway
Alternative risk programs continue to play a significant role for insureds. Structured programs are deployed where there is either a challenging risk or poor loss experience. Parametric programs can be implemented to complement existing insurance programs or provide an alternative form of indemnity. These programs pay a predetermined amount for a specified event based on an agreed-upon index. Captive stop loss programs are deployed to protect against capital erosion.
Structured solutions continue to be deployed in distressed layers, typically primary property and casualty buffer layer, umbrella and/or low-excess layers
- Insureds focused on creating longer-term stability and savings, remain committed to this approach
- Market appetite remains strong with new capacity from traditional markets being made available via MGA/MGUs, with Lloyds markets are active through syndicated facilities
- Carriers are expanding interest into healthcare liability, wildfire, construction and other lines.
Parametric catastrophe (CAT) and weather solutions continue to be a valuable approach, complimenting property policies and adding vital protection for loss costs limited or excluded under a property policy.
- Capacity continues to increase and while established for large and complex insureds, is now actively targeting middle-market and smaller insureds.
- Established for hurricanes and earthquakes, interest is growing for wildfires, tornadoes, hail and general weather (rain, temperature, snow) perils that can impact physical assets but also cause financial loss.
- Parametric products continue to evolve, leveraging data sources and deploying multi-faceted indexes to ensure robust response during events. Hurricanes Helene and Milton highlighted deficiencies in single-peril cat-in-a-circle programs due to size of storm systems and loss driven by surge or excess rainfall versus windspeeds.
- Multiline/multiyear structured reinsurance or stop loss captive reinsurance programs
- Collateral-free “efficient” fronting for highly creditworthy insureds
- Capital-market-led solutions
- Integrated risk programs
While certain lines of insurance are showing rate improvement, alternative risk products remain a tried and tested valuable source of capacity for forward-thinking insureds.
To read more, download the full report below
Download
| Title | File Type | File Size |
|---|---|---|
| Insurance Marketplace Realities 2025 Spring UpdatePDF | 12.3MB |
Disclaimer
WTW hopes you found the general information provided here 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, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
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