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10 trends expected to shape the casualty insurance market in 2017

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  • 10 trends expected to shape the casualty insurance market in 2017

    10. Increased employer and workers' compensation complexities.

    In 2017 and beyond, as the “gig” economy expands and technology further develops, we'll see a continued shift away from the traditional workday and fixed employment locations to part-time, on-demand, and independent contractor arrangements. For an employer, this increases complexities around the implementation of proper safety procedures and the delivery of timely and quality medical care to injured employees.
    9. Increased purchases of excess liability limits.

    Increased purchases of excess liability limits are expected in 2017. The present soft excess market provides low-cost access to contingent capital. Sophisticated analytical tools exist to quantify the likelihood of a loss greater than the current excess liability limit purchased.
    8. More underwriting scrutiny from a coverage perspective.

    We'll see more underwriting scrutiny from a coverage perspective in 2017. Differentiation in program choices will be more about coverage than price as unknowns increase and carrier positions begin to diverge. These differing approaches will occur as clients have access to more analytical data and information to help them better analyze coverage differences.

    7. Sensor technology explosion.

    Technology advancements, coupled with the ability to digest vast amounts of data and arrive at actionable recommendations, will allow the insurance industry to improve loss ratios, analytics, claims handling and workplace safety.
    6. A push for higher casualty rates.

    Insurers’ margins are under pressure and shrinking due to competition, new market entrants, and downward rate pressures. A need to expand margins will lead to insurers trying to push for higher casualty rates in 2017.
    5. Progress in the consolidation of personal and commercial automobile insurance and products liability.

    The conversion to autonomous vehicles will not be completed in 2017, but we will see stepping stones in the consolidation of personal and commercial automobile insurance and products liability.
    4. Focus back to growth.

    Since 2008, insurers generally have increased underwriting discipline. With limited investment income opportunities, insurers have largely focused on underwriting profitability rather than premium growth. In 2017, however, this strategy may lose ground. The marketplace appears to be getting more aggressive despite indications that underwriting results are deteriorating and inflationary claim trends will not be offset by rate. This could lead to greater-than-expected volatility for various product lines or industry segments.
    3. Ongoing InsurTech disruption.

    The insurance industry is converging with the technology sector. Capital is looking for a home in disruptive technologies aimed at the insurance industry’s inefficiencies. The insurance industry’s sluggish response to the sharing economy has left a major crack through which InsurTech disruptors could gain a foothold. Further expansion into other parts of the value chain could follow.
    2. Transfer of risk of the unknown to specialty product lines.

    Over the last two years, the Insurance Services Office (ISO) and insurers have created a number of cyber exclusions for commercial general liability (CGL) policies. Largely, these exclusions seek to eliminate some combination of intangible property damage, nonphysical damage, and advertising or personal-related liabilities that were not originally contemplated by CGL policies. In 2017, insurers will likely continue to create policy language and endorsements that clarify how commercial and personal lines policies address a number of evolving risks, including:
    • The sharing economy.
    • Drones.
    • Self-driving cars.
    • 3D printing.
    • Genetically modified organisms (GMOs).
    ... finally (drum roll)



    (photo Istock) 1. More unintended consequences from the Internet of Things (IoT).

    As interconnected technologies take greater hold and autonomous vehicles, drones, 3D printing, and other new risks emerge, the insurance industry will need to address the blurred lines between specific forms of coverage, including general liability, product liability, cyber insurance, and auto liability. The level of interconnectedness magnifies the potential frequency and severity of adverse events as the impact of an individual loss can ripple through an entire connected system. This possibility directly contributes to insurer aggregation fears.


    To read the full article - follow the link below.





    A more aggressive insurance market, technology and changing workforce dynamics are expected to affect the casualty insurance market in 2017.
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