Insurance Marketplace Realities 2023 – International casualty

Stability in the marketplace continues to be the trend in recent months, with more of the same to be expected as we close out 2022. Capacity remains consistently available from the market with competitive pricing, noting caveats relating to higher-risk exposure and individual loss records.

• Related lines of business will continue to impact international casualty renewals; however, recent data is showing buyers can anticipate a stable landscape benefiting from carrier confidence and healthy competition.
• Insureds seeking to plan for 2023 renewal budgets can achieve those goals by seeking multi-year agreements and/or early commitment to terms from their incumbent carrier.
• Buyers can benefit from economies of scale and overall operational efficiency by partnering with a select number of carriers who may support multiple lines of coverage.

Exposure data remains an item with continued scrutiny from underwriting perspective, so insureds are encouraged to invest effort early in advance of renewal

• Coverage territory limitations — Following federal sanctions imposed in recent months in certain regions of the world, global and regional carriers are restricting or eliminating coverage in Russia and Belarus. Coverage from global programs is also a challenge for buyers’ subsidiaries in Ukraine, as the landscape becomes increasingly unstable. In these cases, insureds should seek independent coverage in the local market, which may not benefit from excess/DIC limits.
• PFAS issues (per & poly-fluoroalkyl substances) are becoming increasingly visible, particularly for insureds in the manufacturing and retail space, and certain insureds are being asked to complete coverage questionnaires to avoid exclusionary language.
• Communicable disease exclusions remain fairly common, although the policy language is inconsistent across the market. If provided sufficient detailed information, underwriters may limit or remove the exclusionary language.

Renewal results are often impacted by decisions relating to program structure and connectivity with related lines of coverage.

• Administration forms a significant portion of global program costs, which can offset direct risk-transfer rate movements at renewal. Insureds can consider options to address program administration costs by reviewing program structure and centralizing premium collection where permissible along with the collection of exposure data.
• There are, however, pros and cons to making changes to program limits or how locally admitted policies are issued. For example, reducing limits and/or reducing the number of local policies can save costs; however, insureds should review how those changes might impact obligations to evidence liability limits in the local countries.
• Regardless of the size of the insured’s business overseas, the three separate casualty renewals (U.S., umbrella and international) should remain closely connected throughout the renewal process to prevent gaps and to leverage premium spend. Coordination among the renewals is critical, especially on issues such as occurrence and suit locations and coverage territory, as well as attachment strategy regarding excess limits.