Global Insurance Marketplace Insights Q1 2026 – Property & Casualty

JIM MAHONEY: Hello, everyone, and welcome back to Marketplace Insights, where we're diving into what's happening across the North American P&C and product recall landscape. I'm Jim Mahoney. I lead our North American Casualty team for our direct and facultative team in London, and joining for the first time as guest host today. And today, I'm joined by three brilliant colleagues-- Laura Shipton, Director of our North American Property Team; Louise Dorrian, Head of Product Recall; and Kirsten Monaghan, Deputy Head of North American Casualty.

Great to have everyone back today.

LOUISE DORRIAN: Thanks for having us again.

JIM MAHONEY: On our last episode, each of you gave a deep dive on what you were seeing across your respective parts of the market. Let's just get a quick update and then we can dig into some recent developments in more detail. Kirsten, why don't we start with you?

KIRSTEN MONAGHAN: Sure. For US Casualty, not much has changed since our last discussion. We're still very much in a hard market. Rate increases remain the norm, driven by social inflation, nuclear verdicts, and litigation funding. On average, we're probably seeing high single-digit increases. But it really depends, varying on the insurer's exposure, profile, loss history, et cetera. In particular, though, auto liability remains the toughest area.

Losses routinely reach eight or nine-figure sums. And that continues to drive higher attachment points, shorter line sizes, and increased premiums. Alternative structures and swing plans are still very much in play.

JIM MAHONEY: Right. So if I'm hearing that correctly, it's pretty much the same story in the casualty market. Conditions remain tough and challenging for clients. That said, is there any light at the end of the tunnel? When can we see some relief coming and what are you seeing?

KIRSTEN MONAGHAN: Yeah, there are some areas showing a bit of relief. For well-performing insurers with more vanilla exposures and clean loss histories, rate rises are slowing. And for these types of risks, insurer turnarounds are absolutely critical now. Quick responses make the difference in securing or retaining capacity, especially against the domestic E&S competition. But to be clear, the market isn't turning to a price competitive position just yet.

And then for US construction projects, this remains an area of strong appetite across both domestic and London markets, helped by infrastructure spending and a surge in data center projects. London continues to keep step in where domestic carriers are retrenching. For renewable construction programs, though we're seeing similar dynamic to the general US casualty space, and especially around auto fleet management. There is a huge focus here due to the nationwide contractor fleets.

JIM MAHONEY: Awesome. Thanks for that, Kirsten. Now, given how hard the casualty market remains, I'd like to hear a little bit of a contrast of what's going on in property. Laura, let's bring you in here.

LAURA SHIPTON: Yeah well, interesting, the North American property market is softening at the exact moment the underlying risk is actually deteriorating. Climate change, secondary perils like wildfire and hail, and the rising loss severity all point to increased risk. Yet pricing is falling simply because there's an abundance of capital. There's a huge amount of capital across insurers, reinsurers, and alternative capital. And so competition continues to be fierce. And that pressure is pushing prices down despite worsening exposure.

JIM MAHONEY: Excellent. Sounds great for clients. What about the upcoming quarter, how are things looking?

LAURA SHIPTON: It's shaping up to be one of the sharpest downturns in recent memory, with a heavy renewal season, significant rate relief, and pressures on signings. Many markets are writing to try to protect their income, and if there's another benign CAT season, the softening will definitely continue. But if we get a major CAT year this year, capital can definitely contract quickly. And with pricing already compressed, the snap-back this time could be severe.

JIM MAHONEY: Yeah, it feels like record softening and unlike anything we've seen in the past. We know clients will really appreciate those falling premiums, but let me just ask you two questions here. First, are you seeing the softening impact terms and conditions yet as the next step following pricing reductions? And then I guess, secondly, are you concerned about this volatility and the whipsawing in rates, and how that impacts on client budget cycles, and other impacts on other parts of their business?

LAURA SHIPTON: Well, pricing is still softening faster than terms, but yes, we're seeing broader coverage, higher limits and a pressure now on lower deductibles. CAT deductibles remain elevated for now, but discipline may erode as competition intensifies. On your question regarding volatility, insurance buyers are definitely in a strong position to take advantage of today's pricing, but budgeting becomes challenging knowing that the market could correct sharply overnight. There's also the relationship element. Rapid softening can weaken long-term partnerships, which clients lean on when conditions reverse.

JIM MAHONEY: Thanks, Laura. Sounds like fun times in the property market. I appreciate your perspective. Louise, let's shift now to the recall market. I quite a bit has changed since we last spoke.

LOUISE DORRIAN: Yes, so unlike P&C, we are seeing some changes in the product recall market despite a large number of significant losses recently, including multiple contamination events in the food manufacturing space. The market remains extremely competitive. We're seeing this play out quite clearly, especially within the recent shift in food and beverage coverage.

Some insurers are now offering quality defect triggers or extending cover to class III actions. This is a major development, as it completely transforms the way in which a product recall policy can now be triggered, meaning there's no longer a requirement for the insured product to cause bodily injury or property damage.

For example, imagine a hugely popular confectionery product suddenly coming out the wrong color. No risk to health, but reputationally unacceptable, or a beverage with a taste deviation due to a mixing error. Historically, these wouldn't trigger a recall policy and would therefore remain an uninsured loss. But with these emerging extensions, they can now be covered. By adopting these coverage enhancements, our clients gain meaningful protection for issues such as incorrect appearance, taste, and smell, which can still be commercially catastrophic.

JIM MAHONEY: Thanks, Louise. I have this vision of my favorite candy coming to me in a very different color than I've always known it growing up, which sounds quite interesting, but now it could be an insurable loss, which adds to the dynamic there. Thanks for your perspective there.

Let's pivot a bit and just shift to some broader emerging risks, particularly AI, which no market commentary today would be complete without. Kirsten, what are you seeing going on in the casualty market as it relates to AI?

KIRSTEN MONAGHAN: Yeah, AI is becoming a material exposure for US casualty insurers. More companies are embedding AI in their operations now, everything from a manufacturing process to customer service chatbots. And as AI becomes more central, the potential liability grow if it makes incorrect decisions, it misinterprets data, miscalculates engineering inputs, or produces harmful hallucinations. We've already seen a few well-publicized incidents with likely significant undisclosed settlements.

The big concern for underwriters is most likely aggregation. Could AI failures trigger mass tort-style litigation? We don't yet how the US courts will handle these claims. But London, as always, is leaning into innovation here. There are creative markets out there willing to lead sustainable solutions, but we're still early and so progress will be likely measured.

JIM MAHONEY: Yeah, it's really interesting. A lot of the big tech companies and new developments in the world of social media and AI are moving at pace. And I think there's a big question on whether the underwriting community is expert enough and has enough experience here to handle those exposures and underwrite them in detail. I mean, while not directly linked to AI, the recent landmark California jury verdict against Meta and YouTube has a lot of parallels against what you discuss, as relates to AI and market aggregation concerns around AI risks. So super interesting, everyone's on top of it, but there are some scary developments and unknown exposures there as well. Thanks for your perspective there, Kirsten.

Laura, let's bring you back in quickly just for a look on how this intersects with the property market. What are you seeing?

LAURA SHIPTON: One of the biggest structural shifts in the market is the rise of facilitation and algorithmic fast-follow capacity. From a London perspective, these are very much reshaping how risks are placed and priced. Facilities allow markets to bundle capacity, in quote, "quickly," creating highly competitive pools of capacity. They're transformative for the mid-market risks that we place. They dramatically reduce placement timelines and therefore acquisition costs.

LOUISE DORRIAN: Yeah, we're seeing similar trends in product recall, where facilitized placements are making it easier for insurers to deploy capacity on more standardized recall risks. I mean, our automotive component facility has been running for more than 25 years now. So this is nothing new for our market. However, we are seeing more take-up for facilities solutions across all industries and products. So for our clients, this means access to faster quotes, improved pre-agreed coverage extensions, and more consistency in pricing expectations.

LAURA SHIPTON: Yeah, on whether facilitization will reach large, complex risks, we're starting to see the edges of that. Complex industrial and CAT-exposed portfolios still definitely require bespoke underwriting. But AI overlays and standardization push the market in that direction. The risk, of course, is underpricing and discipline erosion. And in a major CAT year, automated capacity could recoil sharply. Brokers are innovating too. At Willis, we have PRISM, which is our proprietary pricing tool, and this allows brokers to pre-optimize structures before going into the market, therefore shaping insurer behavior, and contributing further to downward pricing pressure.

JIM MAHONEY: Thanks, Laura. I always find the facilitization question really interesting. It seems like the market is trending more towards key leaders and fast followers. But the question is, will those in between get lost, and at what point does facilitization and quick follow capacity reach that percentage of a placement where it maxes out, and we need lead markets to step up and lead?

Thank you, everyone. Fantastic insights from all of you. We've covered a lot, hardening in the casualty market, the rapid softening in the property market, innovation in recall, and the growing influence of AI and facilitization. A huge thank you to Laura, Louise, and Kirsten for joining today. Really great to be with you as well. And to everyone listening, we'll see you on the next episode of Marketplace Insights. Thanks

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