Apr 13-19, 2025

Insurance Market

AM Best: Tariff Uncertainty Could Lead to Credit Rating Changes for Insurers

AM Best warns that ongoing tariff uncertainty poses a "credit negative" risk to insurers, potentially leading to credit rating downgrades due to market volatility and inflationary pressures. The agency highlights that property and casualty insurers with significant equity exposure, as well as lines like trade credit, political risk, and supply chain coverage, could face increased financial strain if tariffs disrupt global trade and elevate loss costs.

‍

Cyber Insurance Market Size Expected to Soar: Munich Re

Munich Re projects that the global cyber insurance market will reach approximately $16.3 billion in gross premiums by 2025, with expectations to double by 2030 due to growing awareness of cyber risks and insurance solutions. Despite this growth, a significant portion of cyber risks remains uninsured, particularly among small and medium-sized businesses that often lack adequate safeguards or awareness.

‍

Insurers Need End-to-End Strategy to See Double the ROI in AI Implementation

A Boston Consulting Group report emphasizes that insurers can double their return on AI investments by concentrating on core functions like underwriting, claims processing, customer service, and sales, rather than dispersing resources across multiple areas. The study highlights that integrating AI in these key operations can lead to significant efficiency gains and cost reductions, but achieving these benefits requires a comprehensive strategy that includes investments in technology, personnel, and process redesign.

‍

Is State Farm General Too Big to Fail? Calif. Rate Hearing Concludes

During a recent hearing, State Farm General requested an emergency 17% homeowners insurance rate increase in California, citing financial instability and the need for a $400 million capital infusion from its parent company. Consumer advocates challenged the request, arguing that the insurer failed to provide sufficient actuarial evidence to justify the hike and warning that approving such increases without proper analysis could set a concerning precedent.

‍

Marsh McLennan reports Q1 2025 results

Marsh McLennan reported strong financial results for Q1 2025, with consolidated revenue rising 9% year-over-year to $7.1 billion, driven by organic growth and recent acquisitions. The firm's risk and insurance services segment, including Marsh and Guy Carpenter, saw significant gains, while consulting divisions Mercer and Oliver Wyman also contributed to solid performance.

‍

Penn Mutual Life reports higher 2024 net income

Penn Mutual Life Insurance Co. reported a significant increase in net income for 2024, reaching $1.33 billion, up from $201 million the previous year, largely due to the sale of Janney Montgomery Scott LLC and substantial realized capital gains. The company also saw growth in total revenue, assets, and surplus, and approved a record $265 million dividend for 2025, reflecting its strong financial position.

‍

Progressive Q1 Net Income Up 10%

Progressive Corporation reported a 10% increase in Q1 2025 net income, totaling approximately $2.6 billion, despite a 42% decline in March earnings due to severe weather-related catastrophe losses. The insurer's combined ratio remained stable at 86, and net premiums written rose 17% year-over-year to $22.2 billion, with personal lines premiums up 20%, driven by a 25% growth in direct auto channels.

‍

Travelers Income Drops 65% on Catastrophe Losses, Primarily California Wildfires

Travelers reported a 65% drop in Q1 2025 net income to $395 million, primarily due to $2.3 billion in catastrophe losses, including $1.7 billion from California wildfires. Despite the underwriting loss, the company saw a 5% increase in net written premiums and favorable reserve development across all segments.

‍

U.S. P/C Industry Combined Ratio Headed Back Up to 100: S&P Ratings

S&P Global Ratings forecasts that the U.S. property/casualty insurance industry's combined ratio will rise to between 98 and 100 in 2025, up from 96.6 in 2024, due to elevated catastrophe losses and diminishing reserve cushions. The January 2025 California wildfires alone are expected to consume 30% of carriers' annual catastrophe budgets, contributing 7 to 10 percentage points to first-quarter combined ratios, and potentially straining full-year earnings for insurers with significant geographic exposure.

‍

Reinsurance Market

Guy Carpenter CEO expects continuation of 1.4 trend at mid-year renewals

Guy Carpenter CEO Dean Klisura anticipates that the mid-year reinsurance renewals will reflect the stable market conditions observed during the January 1 and April 1 renewals, with consistent pricing and attachment points. He highlighted the Florida market's stability, supported by an active catastrophe bond market and recent legal reforms, and noted a trend of clients increasing their property catastrophe coverage limits ahead of the June 1 renewal period

‍

Hannover Re fronted more collateralized reinsurance participations for investors in 2024

Hannover Re significantly increased its fronting of collateralized reinsurance participations for investors in 2024, with investor-furnished collateral rising to €7.19 billion. Despite a slight drop in ceded exposure limits, the shift reflects a strategic move toward structures with stop-loss coverage, reinforcing Hannover Re’s expanding role in the ILS market.

‍

Markel to acquire specialist marine MGA MECO Markel has agreed to acquire The MECO Group Limited, a specialist marine managing general agent (MGA) operating in London, Dubai, and Shanghai. MECO offers marine insurance products through brands like The Charterers P&I Club, Transmarine, and Aurora P&I, and provides legal services via its law firm, True North. This acquisition aims to enhance Markel's marine capabilities and expand its presence in the Asia-Pacific and European markets.

‍

Reinsurance industry sees investment yield climb to 4.4% in 2024: Gallagher Re

According to Gallagher Re’s full-year 2024 Reinsurance Market Report, the reinsurance industry’s total investment yield increased to 4.4%, up from 3.9% in 2023. This improvement was primarily driven by a rise in the running yield to 3.8%, attributed to higher reinvestment rates aligning with new money yields, while the gains yield slightly decreased to 0.6% due to modest declines in interest rates and stable equity markets.

‍

Reinsurance returns still strong, growth a rational view: J.P. Morgan

According to a recent J.P. Morgan analysis, reinsurance returns remain robust despite some softening in recent renewals, prompting reinsurers to pursue growth while conditions are favorable. Analysts caution that while returns are likely to stay elevated for the next 2–3 years, increased competition and capital deployment could eventually compress margins, echoing past market cycles.

‍

Commercial Lines

As President Considers Auto Tariffs Pause, Parts Exemptions Could Be Key for US Industry

President Trump suggested a temporary pause on 25% auto industry tariffs, particularly on parts, to allow automakers time to shift production to the U.S. The tariffs, effective April 3 for vehicles and May 3 for parts, have disrupted global supply chains, raising costs and prompting some manufacturers to pause operations. Experts argue short pauses won’t suffice for supply chain adjustments, but exemptions for U.S.-made parts could help. Auto stocks rose, though concerns persist about price hikes and production challenges.

‍

Ford Recalls More Than 148,000 Vehicles, NHTSA Says

Ford is recalling over 148,000 vehicles in the U.S. due to two safety issues. The first recall affects 123,611 units of 2017–2018 Ford F-150, Expedition, and Lincoln Navigator models for a brake fluid leak that could reduce braking performance. The second involves 24,655 of the 2025 Explorer vehicles, where a software issue may cause the powertrain control module to reset while driving, potentially damaging the park system or causing an engine stall.

‍

Hertz Says Hackers Stole License Numbers, Credit Card Data

Hertz has disclosed a data breach resulting from a cyberattack on its vendor, Cleo Communications, leading to the exposure of customers' personal information, including names, driver's license numbers, credit card data, and workers’ compensation details. The breach, which exploited zero-day vulnerabilities in Cleo's platform during October and December 2024, did not compromise Hertz’s internal systems, but the company confirmed that its data was accessed by unauthorized parties.

‍

Majority of Small Business Leaders Think AI Will Play A Crucial Role in Work Safety

A survey by Pie Insurance found that 64% of small business leaders believe AI will play a crucial role in workplace safety over the next five years, with 81% open to integrating AI into daily operations. AI applications like predictive analytics, telematics, and virtual safety assistants are enhancing operational efficiency and safety, though experts caution against over-reliance without proper human oversight.

‍

New Hampshire Insurers Must Offer In-Person Auto Inspections, Bulletin Says

The New Hampshire Insurance Department issued a bulletin clarifying that insurers using virtual claims adjustment systems for auto damage must offer in-person inspections upon consumer request, as mandated by the state’s Unfair Claims Settlement Practices law. Virtual tools cannot replace thorough investigations, ensuring fairness and transparency.

‍

What's happening in the global marine insurance market?

The global marine insurance market is experiencing a softening in hull and machinery rates, particularly in London, due to intensified competition among insurers for top-tier fleets, leading to more favorable pricing for buyers. However, challenges such as rising repair costs, geopolitical tensions affecting war risk coverage, and recent incidents like the collision between the Solong and Stena Immaculate underscore the need for insurers to maintain underwriting discipline to ensure profitability.

‍

Emerging Risks

In Last-Minute Reversal, US Agency Extends Support for Cyber Vulnerability Database

In a last-minute decision, U.S. officials have extended funding for the MITRE Corporation's Common Vulnerabilities and Exposures (CVE) database by 11 months, averting a potential lapse in this critical cybersecurity resource. The move follows widespread concern from the cybersecurity community and underscores the database's importance in identifying and managing software vulnerabilities.

‍

Insurance for renewables under pressure as climate risks accelerate: GCube

A GCube Insurance report highlights that renewable energy projects globally are facing increased insurance challenges due to escalating natural catastrophe risks and extreme weather events. These challenges have led to higher premiums, stricter coverage terms, and complications in project financing, particularly in regions like the U.S., Europe, the Middle East, and Australia.

‍

Lemonade attributes data breach to technical issue in auto insurance quote system

Lemonade disclosed that a technical issue in its auto insurance quoting system led to the inadvertent exposure of approximately 190,000 applicants' driver's license numbers, which were mistakenly shared with a third-party data provider without standard protections. The company has implemented corrective measures and stated that its core operations were not compromised, emphasizing that customer data was not specifically targeted.

‍

More Resilient Organizations Successfully Battled Ransomware in 2024: BakerHostetler

Organizations are becoming more resilient against ransomware attacks, with BakerHostetler's 2024 report noting improved backup strategies and a 33% decrease in average ransom payments to $501,388. The healthcare sector remains the most targeted, and phishing continues to be the leading cause of incidents, though enhanced collaboration among insurers, law enforcement, and cybersecurity firms has led to faster containment and reduced costs.

‍

Trade war spurs insurance policy demand

Amid escalating U.S. tariffs—reaching up to 145% on certain Chinese imports—businesses are increasingly turning to trade credit insurance to mitigate risks associated with tighter margins and potential payment defaults. This surge in demand is straining insurers' capacity, as underwriters face heightened credit risks and economic uncertainties, prompting concerns about reserve adequacy and the broader impact on various insurance lines, including political risk and marine coverage.

‍

Litigation & Mass Torts

Court dismisses insurers' breach claims against Blackbaud over 2020 cyberattack

A Delaware state court dismissed breach-related lawsuits filed by Travelers and Philadelphia Indemnity against Blackbaud, ruling the insurers failed to provide specific allegations tied to individual insureds or establish a direct link between Blackbaud's actions and the incurred costs. The court emphasized that the aggregated claims lacked the necessary detail to support subrogation or breach of contract claims, effectively ending the case at the trial level.

‍

Judge Orders Bank of America to Pay $540 Million in FDIC Lawsuit

A federal judge has ordered Bank of America to pay $540.3 million to the Federal Deposit Insurance Corporation (FDIC) over allegations that the bank underpaid its deposit insurance assessments between the second quarter of 2013 and the end of 2014. The ruling rejected Bank of America's claims that the FDIC's reporting rules were arbitrary, affirming the agency's authority to enforce regulations designed to ensure banking system stability.

‍

Liberty Mutual avoids liability in performance bond dispute with subcontractor

The Eighth Circuit Court of Appeals upheld a ruling that Liberty Mutual is not liable under a performance bond to subcontractor E&I Global Energy Services, as E&I lacked a direct contractual relationship and no valid assignment of rights was established. The court emphasized the enforceability of non-assignment clauses and the importance of formal contracting procedures in limiting surety obligations.

‍

New York Jury Awards $1.68B to Women Who Accused Director of Sexual Abuse

A New York jury awarded $1.68 billion in damages to 40 women who accused writer and director James Toback of sexual abuse spanning 35 years, marking one of the largest verdicts since the #MeToo movement began. The lawsuit was enabled by New York’s Adult Survivors Act, which temporarily lifted the statute of limitations, allowing the plaintiffs to seek justice for alleged abuse occurring between 1979 and 2014.

‍

Roofing Contractor Settles for $290K After Teen Worker’s Fatal Fall

Troyer Construction LLP, operating as Troyer Roofing & Coatings, agreed to a $290,000 settlement after a federal investigation revealed violations of safety regulations leading to a teen worker's fatal fall in March 2023. The settlement includes OSHA penalties, child labor fines, and criminal penalties, and mandates the company's participation in Missouri’s On-Site Safety and Health Consultation Program.

‍

Triple-I Launches Legal System Abuse Awareness Campaign in Louisiana

The Insurance Information Institute (Triple-I) has launched a public awareness campaign in Baton Rouge, Louisiana, to highlight how legal system abuse—particularly frivolous lawsuits—contributes to rising auto and home insurance premiums. The initiative includes billboards and a microsite, StopLegalSystemAbuse.org, aiming to encourage consumer support for legal reforms that could stabilize the state's insurance market and reduce household costs.

‍

People Moves

Berkshire Hathaway Specialty Insurance Names Jeff Murdock Head of U.S. Property Claims

Berkshire Hathaway Specialty Insurance promoted Jeff Murdock to Head of U.S. Property Claims, succeeding Scott Lee, who is retiring. Murdock, with 17 years of industry experience, joined BHSI in 2015 and will continue to uphold the company’s “CLAIMS IS OUR PRODUCT” philosophy.

‍

DUAL North America strengthens flood insurance leadership

DUAL North America appointed Cameron Conboy as Executive Vice President of Flood to lead its flood insurance division. With 19 years of experience, Conboy will enhance DUAL’s innovative flood solutions, offering primary and excess coverage up to $15 million, competing with the NFIP, and strengthening broker partnerships.

‍

Global Aerospace Appoints Nicholas Methven as Head of Aerospace

Global Aerospace elevated Nicholas Methven to head of aerospace, recognizing his 22-year tenure and expertise in the sector.

‍

Highstreet Appoints Stazzone to President of Industry Solutions

Highstreet Insurance & Financial Services appointed Vincent Stazzone as President, Industry Solutions. Previously President, Gulf Region, Stazzone will lead specialized operations to address niche industry risks. With a proven track record, he aims to enhance client offerings and anticipate market challenges. Highstreet, founded in 2018, is based in Traverse City, Michigan.

‍

IMA Hires Crochet as National Energy Practice Leader

IMA Financial Group hired Stephanie Crochet as national energy practice leader, leveraging her extensive background in the energy sector, most recently as director of risk and insurance at Plains All American Pipeline.

‍

Lockton Announces Devin Beresheim as US Risk Solutions Leader

Lockton promoted Devin Beresheim to U.S. Risk Solutions leader, unifying its Property & Casualty and Professional and Executive Risk practices.

‍

NFP Welcomes Caleb Weir

NFP, an Aon company, appointed Caleb Weir as Senior Vice President, Construction and Infrastructure, in its Central region, based in Kansas City. With over a decade of experience, Weir will drive growth in risk management and surety services, reporting to Amanda Ruback and aligning with Adrian Pellen.

‍

Xceedance appoints Subramanian Sankaran as Global COO

Xceedance has appointed Subramanian (Subbu) Sankaran as its Global Chief Operating Officer, bringing over 30 years of experience in global operations and transformation roles across insurance, healthcare, finance, procurement, and HR. Sankaran joins from Wipro, where he served as Vice President – Global Practice Head for BFSI and HRO, and has also held senior leadership positions at GeBBS Healthcare Solutions, Accenture, and WNS Global Services.

‍

Zurich U.S. Middle Market Welcomes Technology Industry Practice leader

Zurich North America appointed Jeannie Sullivan as head of technology for its U.S. middle market team, bringing her 35 years of insurance experience, including leadership roles at CNA, Berkley Technology Underwriters, and OneBeacon.

‍