2023 State of the Market

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Executive Summary    |    Industries    |    Business Insurance    |    Employee Benefits    |    Private Client Services    |    Risk Management

Welcome to the 2023 edition of our State of the Market Report. We publish market updates bi-annually to keep you abreast of insurance trends, market drivers, insurance rates, and recommendations on how to navigate the current market.

For every business, risk management is a critical component of business resilience, profitability, and success. In 2023, we are seeing some signs of insurance market stability and rate moderation. Businesses with a preferred risk profile will be in the strongest position to get the best rates and terms. The same can certainly be said for individuals in the personal lines and private client space. We are here to help you manage the headwinds.

NOTE: Discover valuable insights on 2024 insurance market conditions. For a detailed analysis and comprehensive information, visit our State of the Insurance Market | 2024 Initial Outlook.

Executive Summary

2023 Market Conditions

We continue to face uncertain economic conditions. Areas of ongoing volatility include:

  • Inflation and rising interest rates, leading to uncertainty about future prices.
  • Per NOAA, there were 18 U.S. weather/climate disaster events in 2022 with losses exceeding $1 billion each.
  • Ransomware and cyberattacks continue to grow. Approximately 80% of attacks result from human error.
  • Higher claims costs from escalating verdicts and rapidly evolving environmental, social, and governmental (ESG) conditions are affecting individuals and businesses.
  • Employers are spending more on compensation and benefits to counter continued challenges with attracting and retaining talent.
  • War, in addition to being a humanitarian crisis, is affecting supply chains and consumers around the world, as well as adding uncertainty about future policies and regulations.

Insurance Conditions

Despite the volatility and uncertainty, we are seeing a 53-year low unemployment rate, inflation is beginning to ease, supply chain issues are being resolved, and in general there is a return to more “normal” business conditions.

Specific to insurance we see:

  • Signs of optimism as rates moderate in casualty, management liability, and cyber. For complete details, download the full report to see our Rate Forecast chart. Businesses with a good risk profile will have a competitive advantage.
  • Conversely, property rates, particularly in Florida and California, are increasing while capacity and coverages are limited. Other catastrophe-exposed areas are not immune.
  • Insurance carriers remain disciplined and are looking to manage capacity, control terms and conditions, and adequately price risks. When considering where to utilize precious capital, carriers seek additional underwriting, detail, and are closely scrutinizing risk control measures and the client’s focus and commitment to risk management.

Recommendations for
Building Resilience in 2023

  1. Business and individual resilience – Act to fully understand and manage your risk profile. Work with a specialty broker to holistically understand your risks and protect your assets.
  2. Insurance resilience – Consider alternative risk financing options if traditional insurance does not meet your needs. Many of our clients are exploring captives and other self-insurance options. A specialty broker can evaluate your risk through the lens of both your business and risk underwriting.
  3. Talent resilience – Build an engaged, productive workforce. Your people are your number one asset. Employee culture and engagement are crucial to attracting and retaining talent. There is increased pressure today amidst changing employer/employee dynamics, and major movements such as the Great Resignation, quiet quitting, and employee expectations for behavioral health and wellness. 

    We have all dealt with major upheavals the past
    few years with the COVID-19 pandemic, remote work dynamics, and now changing norms and employees’
    expectations. An employee benefits specialist can inform and advise you.


John Mina, CEO

Seeing the Way Forward (via John Mina)

As I reflect on current events and what is happening in the world, risk is not going anywhere. We urge our clients to think holistically about their business goals and the risks they face, and to take action to manage those risks. Stabilize and develop a comprehensive plan to ensure future resilience and enhance your ability to weather ongoing volatility.

On behalf of the entire Risk Strategies team, we are here to help you navigate the uncertainty and help you protect what matters most to you.

Navigate the State of the Market Report


Selected Highlights from the Report

  • abstract view of umbrellaAviation: New capacity: The last few months of 2022 began to show signs of possible new capacity entering and existing markets trying to increase market share, or at least working to preserve it. This resulted in a more favorable insurance buying environment for clients.
  • Education: There has been a significant reduction in available property limits and capacity for large educational institutions. Blanket limit policies, while still available for best-in-class businesses are being capped at $1 - $1.5 billion.
  • Entertainment: Specialty coverage (production, event cancellation, etc.) rates for film, TV, and contingency businesses appear to be flattening. However, key coverages such as cyber liability, as well as auto, general, and excess liability remain difficult.
  • Healthcare: Despite the ongoing challenges faced by the healthcare industry, medical professionals and practices facing rate increases can take measures to minimize the impact. Maintaining vigilance and staying up to date on developing legislation can help them anticipate and address changes.
  • Marine & Yacht: In the wake of Hurricane Ian and other storms, the Southeast will continue to experience rate increases and capacity challenges. Coverage for yachts in the Caribbean and International waters will continue to be difficult to place.
  • Private Equity: D&O has softened from capacity influx, a promising securities litigation environment, and clearer understanding of the pandemic’s economic impact. Companies who may have been forced to structure programs in layers of $2.5 million or $5 million during the hard market are renewing with a $5 million or $10 million limit.

For more information, please select an Industry below:

Business Insurance

Selected Highlights from the Report

  • SOTM-Business-Insurance-StairsCaptives: As we look further into 2023, there appears to be some easing of commercial premiums in challenging markets (Cyber liability, Directors & Officers, etc). Despite this easing, many clients who are serious about risk management and loss control are continuing to place a meaningful amount of retention in their captives.
  • Cyber: Some clients are still experiencing more severe increases, such as those with inferior controls, but for clients with strong controls and favorable loss experience, there is more pricing consistency year over year.
  • Environmental: It is expected that carriers will attempt to exclude PFAS on new and renewal business and raise deductibles in areas where they have experienced an increase in claims in certain industries groups or cannot demonstrate that a company has not been impacted by the use of PFAS.
  • International: Capacity for accounts with exposures in Ukraine, Russia, and Belarus is severely restricted based on these exposures being excluded from treaty reinsurance renewals. As a result, syndicates looking to provide capacity in these regions are limited to their net capacity lines.
  • Management Liability: The new capacity that came into the market in the past three years had an impact on right-sizing the supply/demand equation, ultimately leading to much more favorable pricing and expanded policy terms.
  • Property: A recent building appraisal analysis showed that nearly 90% of buildings appraised in 2020 and 2021 were undervalued. As a result, 68% of buildings were underinsured by 25% or more and 19% were underinsured by 100%.

For more information, select a solution below:

Employee Benefits


"Striking the right balance between a diverse workforce’s needs and managing and mitigating risks such as those that come with large claims is key to seeing the way forward with an Employee Benefits strategy."

Employee Benefits continues to be an increasingly complex area, with costs rising from multiple directions and recruitment and retention strategies dynamically shifting. In 2023, organizations will need to have sound strategies to balance costs with employees’ needs and expectations. Challenges they're facing include:

  • Economic worries will continue to fuel cost sensitivity
  • Rising pharmacy costs from multiple pressure points
  • Changing recruitment and retention dynamics critical to consider

Featured Recommendation

Use data analytics to make healthcare determinations that reduce costs while providing the best care for staff.

It is essential for employers to carefully steward their healthcare benefits dollars in this environment.

They must understand the inefficiencies in their healthcare programs and use data analytics to drive programmatic changes.

Private Client Services

Industry Insights - Highlights

  • The severity and frequency of catastrophic (CAT) events in premium coastal and mountain communities have led to record losses.
  • Reinsurance costs increased by double digits over the past two years
  • Auto insurers face soaring losses as driving returns to pre-pandemic levels with claims frequency and severity on the rise.

Featured Recommendation

In this environment, Personal Lines High Net Worth clients need to be aware of underinsurance concerns at time of loss. They should partner with their brokers during annual renewals to review key items, including:

  • Changing household circumstances or life events that may trigger new property or liability coverage needs
  • Property replacement costs to ensure values are current and adequate for robust protection
  • And more, as covered in our State of the Market Report


An Important Resource For You

To receive our full list of industry insight, coverage considerations, expected rate changes, and recommendations, please review our 2023 State of the Market Report regarding Private Client Services today.


Risk Management

Risk management is a critical factor for business resiliency, profitability, and success. Today, it’s vital that individuals and businesses have a holistic understanding of their risks and put plans in place to manage them.

Businesses with a strong risk profile, will be in the best position to successfully navigate uncertainty and emerging risks.

Countering today’s risks will require a strategic focus, purposeful action plans, accountability, and continuous measurement and monitoring of results.

Risk identification is a primary step to understanding your risks, followed by a full risk assessment, and putting risk control programs in place to address the gaps.

"Businesses will require tighter risk management controls and face higher insurance underwriting standards."

The best insurance rates and coverages will go to companies that have sound risk management practices in place.


Emerging Risks

  • Environmental, Social, & Governance (ESG): ESG has not been fully defined, leaving many companies to interpret and define their initiatives. Discrepancies, false or misleading ESG statements, or a general feeling that a company is not doing enough, can bring regulatory scrutiny, reputational risks, and litigation.
  • Social Inflation and Litigation Funding: Social inflation is a leading cause contributing to much higher jury awards. We are also seeing third-party litigation funding models contribute to rising costs by providing litigants an entryway to initiate expensive and prolonged lawsuits.
  • Increased Frequency and Severity of CAT losses: Compounding the weather events, the property market, especially the property reinsurance CAT markets, has also been impacted by higher inflation, rising interest rates, and significant loss of capital and liquidity.