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Survey Report

Insurance Marketplace Realities 2023 Spring Update – Middle market

April 28, 2023

While we still foresee a more promising casualty landscape, we entered 2023 with significant headwinds in the property market given unprecedented CAT events, and we expect this trend to persist through the year.
Rate predictions: Middle market

Trend Range
Favorable risks
Neutral +10% to +20%
General liability
Neutral increase Flat to +5%
Increase (Purple triangle pointing up) +5% to +10%
Workers compensation
Neutral decrease -5% to flat
Neutral Increase Flat to +10%
Neutral Increase Flat to +5%
Challenging risks
Increase (Purple triangle pointing up) +30% to +50%
General liability
Increase (Purple triangle pointing up) +5% to +10%
Increase (Purple triangle pointing up) +10% to +15%
Workers compensation
Increase (Purple triangle pointing up) +5% to +10%
Increase (Purple triangle pointing up) +10% to +20%
Increase (Purple triangle pointing up) +10% to +20%

Marketplace overview

  • Carriers have high retention and growth goals and are being aggressive to keep accounts out of the market. Marketing efforts on clean or desirable accounts (e.g., financial institutions, technology, commercial real estate) are resulting in significant rate reductions for insureds.
  • While middle market is an established segment within the broker and carrier community, additional markets continue to enter the space.
  • The insureds that continue to experience hard market pressures either fall within specific industry segments or have significant losses and/or heavy CAT exposures. The tougher classes of business continue to be habitational real estate, transportation, healthcare, social services, hospitality, food and foundries. Proactive measures on risk control will play a key role for accounts in these categories.
  • Property rates have increased at a steeper pace than anticipated at the beginning of the year, particularly for CAT-exposed, challenged occupancies or schedules with valuation concerns. The consensus among insurers is that their clients will continue to pay more for less coverage. Renewal outcomes for these risks can be particularly uncertain when facultative reinsurance is needed.
  • Additional capacity is being reinstated by umbrella and excess markets to gain a competitive edge.


  • Higher frequency, more severe natural catastrophes and mounting losses from secondary unmodeled perils (such as wildfires, floods and convective storms) have caused strain on insurer profitability. Convective storm deductibles are being added in states that previously did not have them or these deductibles are being increased.
  • Property valuations have been a concern for markets given inflation and supply chain concerns. Corrective action is being taken via rate, increased values and coverage wording, such as specific limits or margin clauses (e.g., OLLE). For accounts where valuation was historically untouched, the corrections are more dramatic.
  • Market pressures emanating from 1/1 treaty reinsurance renewals have led to volatility in the market, making CAT exposures extremely difficult to place (named storm, earthquake, flood, wildfires). CAT-exposed risks are realizing increases in price and retentions as well as restricted limits.
  • A proactive strategy on valuation, accurate COPE, capacity and program structure will help brokers and their clients navigate these challenges. This should include a focus on both outstanding risk control recommendations and coordination of prospective carrier visits.
  • Contingent business income continues to see tighter underwriting guidelines and reduced limits.
  • Water damage coverage is experiencing higher deductibles and lowered sub-limits, and water damage mitigation is a focus.
  • Tougher property risks that were written on a 100% single-carrier basis are being pushed to shared/layered programs due to their risk profile and the market’s reluctance to deploy full capacity.

General liability

  • There is a heightened concern surrounding human trafficking exposures for hospitality and real estate accounts.
  • Habitational real estate is an extremely challenged class necessitating E&S support with more frequency. Most admitted carriers will not consider a habitational schedule due to expected loss activity.
  • Sexual abuse and molestation coverage continues to see capacity reductions and scrutinized underwriting, particularly given reviver laws in several states.
  • Some markets are no longer considering uncapped per-location aggregates for certain industries such as real estate.
  • PFAS exclusions are becoming more prevalent and increased scrutiny is expected. Some carriers are willing to remove with confirmation of no exposure; however, others are taking a more stringent approach. This is an emerging topic and carriers are concerned regarding the potential for class-action suits and the cost to defend.
  • Social inflation has continued to make it difficult for markets to accurately project losses, leading them to take an all-lines approach on accounts rather than have a liability-heavy portfolio.


  • Mono-line auto risks are exceedingly challenging to place and should always be leveraged with other lines of business.
  • Hired and non-owned auto continues to be heavily underwritten, and higher exposure accounts are less desirable.
  • Rate need has continued as losses in the industry have increased, despite fewer drivers being on the road in recent years.
  • The introduction of telematics in fleets has become a risk management norm for insureds.

Workers compensation

  • Carriers continue to view workers compensation as a profitable line and are looking to balance their books of business by writing more of this business.
  • Remote working has created questions surrounding accurate payroll reporting, especially in monopolistic states because coverage must be purchased through the state pools.
  • Carriers are requesting details surrounding return to work policies as they impact rating, terrorism capacity and risk control. More underwriting scrutiny is being placed on accounts with exposures in tougher jurisdictions.
  • Auto accidents have more often become the cause of severe WC claims over the past few years.

Umbrella and excess liability

  • Additional capacity is being reinstated by umbrella and excess markets to gain a competitive edge.
  • Higher attachment points are being required by lead markets on both general liability and auto policies for higher risk industries. In these scenarios, buffer layers are being introduced more often.
  • Capacity for lead umbrellas has stabilized and further reductions in limits have become less common.
  • Supported leads tend to be more competitive as carriers leverage the primary lines with their umbrella capacity. In these competitive scenarios, insureds have been able to secure increased umbrella limits undoing retractions that may have happened in recent years.
  • Risk purchasing groups remain inconsistent with increased underwriting, appetite changes, reduced capacity, large increases and market participation changes.
  • Clients continue to review contractual requirements and limits purchased.
  • Abuse and molestation, traumatic brain injury, wildfire, assault and battery and sex trafficking exclusions are being added, or coverage and capacity have been limited, especially where exposure exists.


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 entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).


Krista Cinotti
Head of Middle Market and Select, North America

Beth Cohon
Head of Middle Market Industry and Broking Strategy

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