The US casualty insurance market has been marked by significant claims inflation amid escalating litigation costs in recent years.
Challenges in the legal system, such as widely unregulated third-party litigation funding, time-limit demands, and other factors, remain unchanged and at the forefront of carriers' minds in 2025.
At the same time, the market has seen a surge of capacity and innovation that could drive competition and help lower rates, one expert has told Insurance Business.
“We’re in a market where the fundamentals are shifting,” said Russ Stein (pictured), area vice president at Risk Placement Services (RPS).
According to Stein, much of the new capacity entering the casualty space focused on the same safe areas, leaving distressed classes like lead placements on habitational business, heavy auto risks, and wildfire-exposed risks still hard to place and extremely expensive.
"While it initially seemed like this new capacity would drive competition, much of it has matured over the past few years, and some loss development is likely causing concern,” he said.
The reinsurance market is also weighing whether the rate increases from a few years ago are boosting profitability or if further adjustments are needed, Stein pointed out.
"Casualty lines will likely keep rising, particularly for challenging risks like habitational business, heavy auto, and wildfire-exposed accounts. However, capacity still exists at certain attachment points, which allows brokers to shuffle carriers within large towers and manage renewals more effectively," he said.
For retail agents, this means rethinking traditional methods and embracing sudden shifts, even if it feels uncomfortable at first. Adapting to this environment requires an openness to new technologies and a keen eye for detail in risk evaluation.
“It’s not just about the premiums anymore; it’s about the whole ecosystem of risk and how you adapt to it,” Stein said.
Retail agents must be prepared to navigate the hard market conditions that continue to dominate the US casualty insurance landscape. These conditions, characterized by rising premiums and reduced capacity, require a strategic approach.
“You have to be creative in finding solutions for your clients,” Stein said. “That might mean looking at alternative markets or exploring different program structures.”
One of the most significant challenges is the sheer pace of change in underwriting criteria. Insurers are increasingly relying on advanced analytics and AI-driven tools to refine their risk assessments.
Stein stressed that retail agents must stay informed about these changes and proactively engage with underwriters to advocate for their clients effectively.
“Underwriters are leveraging data in ways we couldn’t have imagined a decade ago,” Stein said. “This impacts not only how risks are priced but also how coverage is tailored to specific needs.”
Technology is constantly reshaping the casualty insurance market, which means brokers and agents must be willing to embrace digital tools that streamline operations and enhance client experiences. Whether it’s leveraging CRM systems to manage relationships or utilizing analytics platforms to gain insights into market trends, technology is a game-changer.
If you’re not using technology to its fullest potential, you’re leaving money on the table,” Stein said. “More importantly, you’re falling behind in a highly competitive market.”
But technology alone isn’t a silver bullet. The human element remains a cornerstone of successful brokerage. Agents must strike a balance between leveraging digital tools and maintaining the personal touch that builds trust.
Building strong relationships with underwriters and managing general agents (MGAs) is another key strategy for navigating the market, said Stein.
"The deals are out there, but success depends on partnering with someone who has their finger on the pulse of the markets,” he said. “Some days, it feels like whack-a-mole – reading about a new MGA or domestic group launching capacity.
“It's crucial to communicate with the underwriting community, understand your incumbents' plans, and explore new entrants you might not have considered before. While capacity isn’t flooding in as it used to, new facilities and emerging products can make a difference.”
Finally, succeeding in the casualty space is not just about having the right relationships; it’s about being able to deliver value. In today’s market, that often means being a source of education and guidance for clients. This requires retail agents to invest time in understanding their clients’ industries and the unique exposures they face.
Stein pointed out that “the days of simply quoting and binding policies are over.”
“Clients are looking for advisors, not just agents,” he said. “They want someone who can explain why their premium went up 30% and what they can do to mitigate future risks.”
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