Why Are Casualty Insurance Rates Still High?

Buyers of commercial insurance can celebrate the fact that property insurance rates have come down considerably from the dizzying heights established by the markets in 2023. However, the story for casualty insurance buyers is not as comforting. According to a recent report by Marsh, casualty insurance premium increases, excluding workers’ compensation, remained at a stubbornly high 7% in the second quarter of 2024. Excess layers are even pricier.

“After conferring with our reserving actuaries, I can confirm that claim cost trends are in the double digits,” said Ashley Moffatt, senior vice president of E&S Brokerage Primary Casualty for Nationwide.

Challenges in Specific Business Sectors

As if seeing increases across the board in casualty isn’t enough of a concern, there are certain classes of businesses where casualty insurers are reducing their appetite or exiting the sector altogether. “We are seeing the most frequent exits in habitational, hospitality with tough liquor and A&B exposures, transportation, and retail exposures with frequency issues, such as grocery stores,” Moffatt added.

There are also geographies where some insurers find it difficult to accept risk due to punitive legal environments and other factors. “We’re witnessing large-scale exits in certain challenging states, irrespective of class,” Moffatt said.

Combining Experience with Technology

In its approach to primary and E&S casualty underwriting, Nationwide can benefit customers, even those with tricky exposures, with a combination of deep experience in the product line coupled with an ever-expanding technology tool set. “At Nationwide, we have more than four decades of experience in the E&S and specialty sector through our Scottsdale paper,” Moffatt said.

Because Nationwide has both primary and excess specialty casualty verticals, Moffatt said the two disciplines can work together and support each other in creating tailored solutions that give both partners and insureds a good degree of confidence.

To learn more, visit: Nationwide.