The property and casualty insurance market has entered a downward phase, driven by insurers’ return to profitability and the arrival of new capacity.
Faced with this dynamic, there is a risk of relaxing efforts or becoming complacent with agreed rate changes and the temporary security provided by term agreements, reverting to a view in which insurance is simply a cost item unrelated to operations.
However, this new cycle is more complex to understand than previous ones and its balance is fragile. It is also accompanied by significant changes in the large-risk brokerage market, which must be taken into account in any long-term strategy.
At KYU, we believe that the easing of the insurance market, combined with current developments in the brokerage world, should prompt the company to thoroughly re-evaluate its insurance programs, brokerage relationships, and transferable risk management systems to put insurance back at the heart of its resilience and make it a strategic asset capable of supporting growth, securing operations, and cushioning shocks in an uncertain environment.
The sustainability of property and casualty insurance programs is built around three pillars :
• A robust and auditable transferable risk management system, a decisive factor in accessing optimal market conditions ;
• Programs designed to withstand cycles, major claims, and regulatory changes ;
• An efficient, structured, technologically equipped, and rigorously managed broker.
Our belief: the real question is not “how much does insurance cost?” but “how can we set up a consistent, optimized, and managed insurance system that supports the company’s resilience?”
1. What if your insurable risk management system became a competitive advantage ?
The market is becoming more flexible, but insurers are not relaxing their requirements. On the contrary, risk selectivity is increasing.
Insurers are granting greater flexibility to companies that can demonstrate a high level of maturity in managing their insurable risks and present them in a structured and substantiated manner, based on reliable data and formalized analyses. Prevention measures and consistency in policies and transfer decisions are also key criteria.
Insurability is no longer based solely on intrinsic risk, but on the company’s ability to demonstrate its control over that risk. Insurance can therefore no longer be managed solely as a renewal process: it must be integrated into the company’s overall risk management system.
It is essential to set up an internal insurance management system that is integrated with risk management: clear governance, defined responsibilities, quality of field reports (insured values), documented claims management, integration with ESG and regulatory issues, etc.
Among these elements, prevention measures are being studied in particular, and insurers’ expectations are changing. Long focused on damage, they now extend to civil liability risks, product risks, transportation, and the supply chain. Insurers expect an upstream understanding of risks and an ability to act before a loss occurs.
Our advice: formalize and promote a robust insurance management system focused on data and prevention, and extend your risk analysis and prevention measures to all new risks in order to create a real competitive advantage in the market.
2. What if you could really take advantage of the downward cycle without compromising sustainability ?
The downward cycle that the insurance market has entered in most sectors (civil liability, property and casualty, cyber, transport, etc.) is fragile, and its duration remains uncertain due to the major risks to which companies and markets are exposed.
In this context, simply taking advantage of rate reductions, which are sometimes limited, or locking in coverage over time, is not enough and could even prove counterproductive. Risk managers must use the current trend to prepare for the future: revisit the structural choices made during periods of market hardship, question the coverage restrictions, sub-limits, and deductibles put in place under duress, and rebuild more balanced and sustainable programs that take into account changes in risks and activities.
With the return of competition, risk-taking in this context is limited: brokers are willing to commit more upstream to conceptual proposals through placement commitments, subject to the quality of the risk and the data provided.
Our advice: take advantage of the return of capacity and competition to thoroughly re-evaluate your insurance programs and prepare for the future by building sustainable programs. Conceptual tendering is a powerful tool for achieving this goal.
3. Why not challenge your brokers to provide you with optimized services ?
Since 2022, the French insurance brokerage market for large companies has been undergoing rapid change under the combined effect of increased competitive pressure—linked to consolidation and the arrival of new players—and higher demands from large accounts in terms of service quality, advice, and data exploitation.
In this context, leading brokers have invested in IT tools (analytical and modeling tools, as well as management and steering tools) to meet two expectations: producing faster analyses and delivering more robust services to their clients while improving the operational efficiency and productivity of their teams.
At the same time, new approaches aimed at promoting “à la carte” services are emerging. This is particularly the case in international management, with the emergence of pure international coordination services to meet the growing desire of large companies to be able to challenge their program brokers more easily.
Recent calls for tenders confirm the impact of these changes. The price dynamics observed are significantly more aggressive, optional services offered independently of the brokerage relationship are more frequent, and service quality commitments are reinforced with higher contractual performance levels.
Our advice: in a more favorable insurance market, the intensity of competition among brokers creates a unique opportunity to rethink both your insurance programs and your brokerage relationships through conceptual and servicing calls for tenders.
