Insurance Marketplace Realities 2019: Willis Towers Watson

A stealth firming of the liability market amid headline-grabbing mergers and acquisitions

London, UK (Nov. 6, 2018) – During 2018, most eyes were on the property market following the catastrophes of 2017. While the property market proved resilient, thanks to the stabilizing impact of alternative capital, two separate trends that followed are currently impacting market conditions for insurance buyers. The first is a relatively modest but definite rise in rates across most liability lines of insurance in response to relentless loss activity, which, given all the worry over property rates, seemed to sneak up on us. The second trend is a resurgence of mergers and acquisitions among insurers, and particularly “mega deals” (i.e., deals exceeding $1 billion).

First, let’s consider rates. Across most lines of insurance (U.S. workers compensation and international liability programs are notable exceptions), insurance buyers can expect increases in the low single-digit to low double-digit ranges. This trend, most consistent in the liability lines — auto, umbrella, D&O, EPL, professional, environmental, etc., is loss driven. Increases in frequency driven in part by rising economic activity and increases in severity driven in part by changing societal views on corporate accountability, and the success of what’s often called “reptile” tactics by plaintiffs’ attorneys, have forced rates upward. Below is a snapshot of the rating environment that is more fully explained in the individual summaries that you can find by clicking on each line in the full report.

Commercial rate prediction charts

For 2019, 14 lines are expecting increases:

  • Auto
  • Cargo
  • Casualty
  • Directors and officers
  • Employment practices liability
  • Energy
  • Environmental
  • Errors and omissions
  • Marine
  • Political risk
  • Product recall
  • Property
  • Senior living and long-term care
  • Trade credit

Two lines are expecting decreases:

  • International casualty
  • Workers compensation

Nine lines are predicted to deliver a mix of small increases and decreases or flat rates:

  • Aerospace
  • Cyber
  • Construction
  • Fidelity and crime
  • Fiduciary
  • Health care professional liability
  • Kidnap and ransom
  • Surety
  • Terrorism and political violence

Now let’s consider insurer M&A. If you’re an insurance buyer and you’re watching your screen for the next merger and acquisition headline (whether it involves insurers, brokers or other service providers), you may be wondering what it means for you and your industry. In the largest sense, the news is good. For the most part, insurer M&A — our focus here — has not had a materially negative impact on capacity or pricing. The emerging, consolidated insurers bring a broader product offering, greater geographic scale and the promise of efficiencies, both technological and otherwise. We forecast that this M&A trend will continue during 2019 as insurers seek tactical, strategic and, in some cases, transformational combinations.

Read more: Insurance Marketplace Realities 2019.

Download the full report here.

About Willis Towers Watson

Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 40,000 employees in more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at

SOURCE: Willis Towers Watson

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