| Trend | Range | |
|---|---|---|
| Structured Solutions | Downward pressure on insurer risk margins | |
| Parametric Solutions |  |
–5% to Flat |
| Integrated risk programs | Limited market appetite | |
| Captive stop loss | Highly customized based on analytics |
Key takeaway
Alternative Risk programs continue to play a significant role for insureds. Structured programs are deployed where there is either a challenging risk or where there is adverse loss experience. Parametric programs are deployed to compliment and sometimes disrupt property placements as they cover “all” loss costs arising from an event. Lastly, there’s growing interest in captive stop loss programs as insureds look to manage retained risk and limit capital erosion.
Structured solutions are strategically deployed where traditional coverage is strained layers — such as casualty buffer, umbrella, low excess and primary property. Simultaneously, insurers are sharpening their focus on protecting captive capital, with stop loss structures gaining momentum as a safeguard against erosion
- Insurers focused on creating longer-term stability and savings, remain committed to this approach
- Market appetite remains strong with new capacity from traditional markets being made available via MGA/MGUs, with Lloyds markets active through syndicated facilities
- Carriers are expanding their interest into healthcare liability, wildfire, construction and other lines
Parametric catastrophe (CAT) and weather solutions continue to be an extremely valuable approach for Insureds. Complementing property policies by offering targeted protection for loss costs that may be limited or excluded under traditional coverage.
- Capacity continues to increase and while established for large and complex insureds, is now actively targeting Middle-market and smaller insureds
- Established for hurricanes and earthquakes, interest is growing for wildfires, tornadoes, hail and general weather (rain, temperature, snow) perils that can impact physical assets but also cause financial loss
- Parametric products continue to innovate and evolve, using data sources and deploying multi-faceted indexes to ensure robust response during events
Other areas of interest
- Multiline/multiyear structured reinsurance or stop loss captive reinsurance programs
- Collateral-free “efficient” fronting for highly creditworthy insureds
- Capital market-led solutions
- Integrated risk programs
While certain lines of insurance are showing rate improvement, alternative risk products remain a tried-and tested valuable source of capacity for forward-thinking insureds.
