Using Carrier Appetites to Your Advantage

The hard market is still dominating the industry, as Ivans reported that the 4th Quarter of 2024 saw year-over-year renewal rates increase for all major commercial lines except workers’ compensation. The same report showed that BOPs, GL, commercial property, and insurance reached year end highs on rates at renewal.

Commercial property rates are leading the way, seeing average increases of 10.67% in December of 2023. Personal lines are still bearing the burden too, seeing a 4.75% average increase in Q4 2023. And that doesn’t seemingly reflect the property insurance crisis in California, Florida, and other coastal states, as many carriers have simply left those markets or completed a wave of non-renewals.

And although there are some signs we may see relief in late 2024 or early 2025, CAT losses and other impacts are unpredictable, and insurance agents must still fight to place business until we see a market change. But there are still opportunities in this market, especially for independent agents.

Carrier Growth Appetites

Insurance companies want to diversify their risk portfolios, whether that be through lines of business, geographic footprint, or demographics of their insureds. As such, there are verticals where we’re seeing appetite growth in the industry. It is wise for independent agents to frequently assess their carrier and wholesale broker partners’ appetites, especially when looking for opportunities to write new business.

Some industries and markets that currently have been growth areas in the industry include:

• Manufacturing: Allianz and other global carriers have noted that they have a broadened appetite for manufacturing, especially for “standard” risks. The marketplace is considered a very “mature” segment, while the knowledge of risk being high for traditional manufacturing operations. Technology that has helped lower risks has also begun to be adopted more quickly than in previous decades.

• Cyber: Although the pricing for cyber liability coverages has come more in line with the risks in the last few years, the appetite to write these risks has stayed strong. We’ve also seen consolidation in the space, with Travelers acquiring Corvus and other moves that seem to be imminent. And while this may reduce market options in the short term, it seems to signal the interest insurers have in writing these risks.

• Environmental Risks: As demand for EV and battery power continues to grow, the marketplace around these and other environmental-related risks has continued to grow. Even markets around carbon risks and carbon credits has seen expansion according to WTW and other global brokers.

• Directors & Officers (D&O): While there was high anticipation in the wake of the pandemic for litigation, much of it never materialized. And while Boards of Directors still have economic concerns in the current environment, a Woodruff Sawyer survey found that, “…fewer underwriters than last year believe that D&O risk is increasing.”

In addition to these segments, and as you would imagine, many carriers are interested in non-CAT or low-CAT risk properties as well. Which brings us to the next point – what if your insureds’ and prospects’ risks simply don’t align with your carriers’ appetites?

That is when you must have the right wholesale broker and E&S relationships. And with this market continually changing, you need partners that can adapt with you.

At QuoteWell, we’re here to help you with rapidly changing landscapes for risk and tracking carrier appetites. Let’s find opportunities together!