Global Insurance Marketplace Insights Q3 2026 – Property & Casualty

JIM MAHONEY: Hello. And welcome to Marketplace Insights podcast series, where we're diving into what's happening across the North American P&C and Product Recall landscapes. I'm Jim Mahoney, Head of North American Casualty for our Direct & Facultative team.

And I'm joined today by our returning cast. Laura Shipton, Senior Director of North American Property. Louise Dorrian, Head of Product Recall. And Kirsten Monahan, Deputy Head of North American Casualty. Great to have everyone back.

LOUISE DORRIAN: Thanks for having us again.

JIM MAHONEY: So on the last episode, each of you gave a deep dive on your respective specialties. So I'm looking forward to hearing those updates again. But more recently, the market's fresh off the back of Monte Carlo Reinsurance Rendezvous.

So we'd love to hear from each of you on those themes and how we expect them to trickle down into the direct marketplace. Laura, let's start with you. We know the Property market is still in freefall. Is there a bottom?

LAURA SHIPTON: Well, as you've heard in my updates over the last year or so, it won't come as a surprise to tell you that the Property market is still incredibly competitive. We're continuing to see rate reductions of 20% to 40%, and in some cases, even more than that. So what's interesting is that it's not just the really good risk getting those reductions.

We're seeing pretty significant savings, even on accounts that have had losses, which really shows you how much capacity is still chasing Property business. And with Q4 just around the corner, I think, there's every chance that competition gets even stronger. If markets are looking to hit those year-end targets, we could be heading into one of the most competitive quarters I've ever seen in my career.

JIM MAHONEY: That sounds like a fun time to be a client, where you're putting losses into the market and still getting premium reductions. So I'm sure our Casualty colleagues would love to sign up for that. So Property is clearly a wash with capacity right now. I'm really interested to hear whether you're seeing the same thing in casualty and recall, or whether the story is really different. Louise, let's go to you.

LOUISE DORRIAN: It's actually very much the same for Product Recall, with an abundance of capacity and intense competition for lead positions, particularly on those larger placements. As mentioned previously, this remains a highly competitive market, driven not only by premium and rate reductions, but also by the lower retentions and broader coverage across the board. We continue to see the losses far exceed the limits purchased. And this is yet to have any negative impact on the pricing or coverage for our clients.

JIM MAHONEY: That sounds like a risk manager's worst nightmare, but nonetheless some very competitive environments in Property and Recall. I suspect it's a bit of a different story on the Casualty side. Kirsten, what's going on in your space?

KIRSTEN MONAHAN: I mean, we're not awash with capacity, but one of the more interesting developments we're seeing in US Casualty is that there is more capacity around, which is making the market feel a bit different to where we were 12, 18 months ago. We're certainly not calling it a soft market, particularly in the more challenging classes, but it does feel like we're moving towards more of a competitive environment.

JIM MAHONEY: Got it. So there's clearly some nuance there between more challenging risks and more favorable ones. But I guess on average, across the book, what do rates look like?

KIRSTEN MONAHAN: Well, for clients with good risk profiles, rate increases are definitely starting to ease. And in some cases we're even seeing modest rate decreases. That's very much in line with what Willis highlighted in its Q2 Casualty state of the market report, where the pace of rate increases continues to slow.

JIM MAHONEY: Well, the rhetoric from markets is more pointing towards increasing losses there. So if the pace of rate increases is slowing, what do you think is driving that?

KIRSTEN MONAHAN: A lot of it just comes down to capacity. Whether it's through MGAs, Captives, ART solutions, or broker facilities, it's bringing capital to the table. And that competition is making it easier to build towers and secure limits. So with more markets willing to participate than we saw a few years ago - when placements often required a lot more creativity and negotiation.

JIM MAHONEY: That ties in nicely with some of the conversations coming out of Monte Carlo. With Property markets still becoming increasingly competitive and softening rates, I think, the big question is where the capital goes next. We've seen some themes around new reinsurance and ILS vehicles. But as respects to this conversation and direct markets, do we expect that capital to find its way to other lines of business?

KIRSTEN MONAHAN: Yeah, absolutely. And some of that capital you mentioned is finding its way into Casualty. But the underlying casualty challenges, such as nuclear verdicts, social and claims inflation, and litigation funding haven't gone away. So tougher risks are still seeing the pressure. But for clients with a strong risk profile and a good loss history, competition is increasing. And they have more options than they've had in recent years.

JIM MAHONEY: Which I guess does explain that disconnect I mentioned before between markets rhetoric on losses and the general competitive and rating environment. So quick summary, still really soft Property and Recall markets and a transitioning casualty market. Aside from price and rates, which we've hit on a few times, what do client conversations look like at the moment? Laura.

LAURA SHIPTON: So what's interesting is that the conversation with clients has changed quite a bit. When you're achieving savings of 30%, 40%, or even more, it becomes much more than a conversation about price. Clients are asking, do we take the saving?

Do we use it to buy more limits or improve the coverage? Do we reduce deductibles? Or actually, is this just a good time to retain more risk within the business? I think that's why placement strategy becomes so important in a market like this.

JIM MAHONEY: Louise, I'd imagine it's quite similar in the Product Recall space. Are your clients having similar conversations? And are insurers having to compete on more than just price?

LOUISE DORRIAN: Absolutely, it's really a best foot forward situation right now with little scope for further negotiation on terms and conditions. So when we're able to enhance coverage of renewal without increasing the cost, that's an instant win for our clients. There's also much greater consideration now for broader insurer relationships, looking at the overall premium spend across multiple lines of business, not forgetting that service remains key. Those insurers that are willing to make commercial decisions up front are often the ones that ultimately win the business.

So this probably leads to the next question. If everybody is competing on price, how do insurers stand out? For me, it really comes down to three things - flexibility, responsiveness and service.

Clients have more choice today than they've had for quite some time. So they're looking beyond just the premium. The insurers that really stand out won't necessarily be the cheapest. They'll be the ones that can show clients they're going to add value when it really matters.

JIM MAHONEY: That all makes sense. And I really love the point on service. I think it can be such a huge differentiator for brokers, insurers and everyone in this industry.

But despite the wider softening across the market, results and insurer-combined ratios continue to outperform, which I guess brings me back to my initial question. Is there a bottom? How sustainable is this?

LAURA SHIPTON: Well, I think that's the interesting part. At some point, we're going to have another significant catastrophe year. And that's when we'll really see how resilient all the capacity is.

We've got a huge amount of capacity competing for business at the moment, but the real test will be what happens when losses start to build again. The question is, are we looking at a fundamentally different Property market now? Or are we just at a particularly competitive point in the cycle?

JIM MAHONEY: Thanks all. We've heard your updates on your respective parts of your business. As always, it remains a dynamic marketplace, albeit the cyclical nature of our industry feels especially apparent at the moment.

I just want to transition a bit to a topic that no business podcast can go without-- AI. We're well aware of the operational efficiencies it will bring, and surely there will be winners and losers on that frontier. But I'm quite interested on how the industry is addressing these new and rapidly evolving exposures in terms of product development, coverage, and client solutions. Kirsten, what are you seeing in casualty?

KIRSTEN MONAHAN: I mean, for our market, I think, the honest answer is that they're still trying to figure it out. AI is being integrated into more business processes every day, but policy language and underwriting approaches haven't necessarily kept pace. And one of the big questions around AI is what happens when it goes wrong. If AI-generated error contributes to a loss, it's not always clear whether that exposure was ever intended to be covered. And that's why we're starting to see AI exclusions emerge, with ISO introducing new language and some insurers already building broad exclusions into their policies.

JIM MAHONEY: I couldn't agree more. It feels like from a solution set, the market is still figuring it out. And while the most obvious lines impacted are the liability lines, we're seeing some activity in the cyber space casualty, professional, et cetera. AI will nonetheless touch every aspect of our clients' businesses in time. And if something does go wrong, determining where the coverage sits can be quite complicated. So eager to see what solutions come to light on the back of that.

KIRSTEN MONAHAN: Yeah, exactly. There's still a lot of uncertainty across the market. Insurers are still trying to work out what they want to cover, what they don't, and how to price for these emerging risks. The technology is moving incredibly quickly, but the insurance response is still catching up. So it's definitely an area clients should be watching closely.

JIM MAHONEY: Very much so. Couldn't agree more. It'll be really interesting to see if AI becomes a new line entirely, much like cyber did years ago, or if existing lines of business find solutions within their areas of expertise.

At the moment, it doesn't feel like most insurers have the technical underwriting expertise to evaluate these new and developing exposures. So unfortunately, it may take losses materializing for folks to react. But anyway, we'll save that for next time.

Just transitioning a bit, I want to do something similar to what we did on the first episode of this show as we close this off, where I ask all of you for some advice. If you could give clients one piece of advice in this market cycle, what would it be? Laura, let's start with you.

LAURA SHIPTON: So I think for clients, this is a really good opportunity. It's worth looking beyond just the premium saving. Look at the overall structure, the coverage and the amount of risk you're retaining, and think about whether you could be doing things differently.

JIM MAHONEY: Kirsten.

KIRSTEN MONAHAN: Tell your story. Don't just provide loss runs and exposure information, but show how investment and risk management has really improved the risk.

JIM MAHONEY: And Louise.

LOUISE DORRIAN: So I'll take a slightly different angle to Laura's response that in a soft market cycle, when you're saving money, it's important to consider other areas of the business, which could be exposed, or the non-compulsory lines of business such as Product Recall.

JIM MAHONEY: Great advice, and fantastic insights from all of you throughout. So thank you very much. We've covered a lot-- ongoing challenges but an improving picture in Casualty, rapid softening in Property, innovation and Recall, and the market's response to AI exposures.

A huge thanks to our repeat guests, Laura, Louise, and Kirsten for joining today. And great to be with you all as well. And to everyone listening, thanks. And we'll see you on the next episode of Marketplace Insights.

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