United States Insurance Market Report 2015

With growing capacity and strong competition among insurers, the US insurance market was generally favorable to buyers in 2014 with good risk profiles and is expected to remain so.

The much-anticipated 2015 release of the revised Fair Labor Standards Act regulations is likely to increase wage and hour claim filings, a key issue to watch in employment practices liability.

The outlook for the US insurance market appears generally favorable for 2015 amid ample capacity and intense competition among insurers in most coverage lines. The general softening of property and casualty markets seen at the end of 2014 is expected to continue, barring unforeseen events.

Among the key findings from the US Insurance Market Report 2015:

• Cyber remains one of the fastest growing sectors in the insurance market, as evidenced by continued growth in premium and policy count, as well as the steady influx of new capacity. Significant volatility in pricing seen during 2014, is likely to continue in 2015.
• The release of the revised Fair Labor Standards Act regulation is likely to increase wage and hour claim filings, a key issue to watch in employment practices liability in 2015. Employers should pay special attention to changing laws in this area.
• The captive insurance market is expected to continue to grow this year; captive owners should be focused on evolving regulations in domiciles foreign and domestic.
• If oil prices hold steady at $60 or less, many energy companies are expected to reduce capital expenditures for exploration and production, especially in high-cost project areas such as deepwater drilling and Arctic exploration.
• With political risk insurance capacity at record levels, buyers in 2014 experienced generally favorable market conditions, which are expected to continue into 2015.
• Bankruptcies in the US retail sector caused some trade credit insurers to express concerns and take steps to reduce their exposure to that industry; however, there does not seem to be an effect on the overall market. In the fourth quarter of 2014, rates typically decreased 5% to 10%.