As commercial insurance pricing ease, businesses face an important question: Should they pocket the savings or reinvest in broader risk protection?
According to Adam Balentine (pictured), president of national business insurance at Marsh McLennan Agency, many clients are using the softer market to repair insurance programs that were pared back during years of rising premiums and tightening capacity.
With property rates moderating and capacity returning in several lines, he said brokers have an opportunity to help clients revisit coverages that may have been reduced or neglected during the hard market cycle. This includes excess liability towers, cyber insurance limits, executive liability coverage and catastrophe-related property protections such as flood, earthquake and named windstorm coverage.
“The prolonged hard P&C market created deferred maintenance in insurance programs because budgets were being eroded by compounded property rate increases year after year,” said Balentine, whose responsibilities span clients from small businesses to large national accounts in the US and Canada.
Insurance buyers have spent years prioritizing property renewals as rates surged following natural catastrophe losses, inflationary pressures and reinsurance constraints. In many cases, organizations reduced limits or accepted narrower coverage terms elsewhere in order to manage overall insurance budgets.
But instead of viewing the current market dynamics as an opportunity to simply cut costs, Balentine said he’s seeing more corporate leaders are taking a strategic approach. “Most strategic CFOs are actually comfortable with a budget-neutral approach, or even spending slightly more year over year, if they see meaningful improvements in coverage and risk transfer,” he explained.
Rather than approaching renewals as a cost-reduction exercise, Balentine said brokers can help clients identify areas where coverage may no longer align with their current exposures, growth plans or industry benchmarks.
Cyber insurance is one area where this strategy is particularly relevant. While premium pricing has softened significantly in recent renewal cycles, claims activity and loss severity continue to evolve.
“We’re still seeing an increase in claims activity and evolving claim types, even though cyber premiums are declining year over year,” Balentine said.
The disconnect, he argued, creates an opportunity for organizations to strengthen cyber programs while market conditions remain favorable. Brokers should guide clients around benchmarking limits, reassessing exposures and evaluating whether coverage enhancements are needed instead of simply accepting lower premiums.
Balentine also pointed to growing concerns around supply chain disruption, geopolitical instability and trade volatility. Businesses are increasingly exploring contingent business interruption coverage, trade disruption insurance and trade credit solutions to address operational vulnerabilities that extend beyond traditional property losses.
At the same time, liability challenges persist for many industries despite signs of improvement in some segments. “Anything involving fleets - especially larger fleets or heavier auto classes - remains very challenging, and we don’t expect significant relief there anytime soon,” Balentine noted.
Still, improved reinsurance conditions and additional underwriting capacity are creating opportunities for businesses to negotiate more aggressively in the excess liability market.
Balentine said some organizations were forced to reduce liability towers during the height of the hard market due to rising property costs. In one example, a client cut its excess liability tower from $50 million to $25 million to offset premium increases elsewhere.
“Now is the time to revisit those decisions,” he said.
Peer benchmarking exercises, he added, can help companies determine whether their current liability limits remain aligned with industry norms and potential loss exposures.
Beyond insurance placement itself, Balentine said clients increasingly expect brokers to provide broader strategic guidance. Clients want brokers who understand operational and enterprise-wide threats, including risks that may not have a direct insurance solution.
“What clients are really focused on right now is specialization and the type of specialization we bring to the table, both in terms of industry expertise and risk management solutions,” he said. “Sometimes the conversations we have are about the things keeping CFOs awake at night, and there may not be an insurance product for those concerns. Maybe it’s about risk mitigation or avoiding a certain activity altogether.”
Businesses are also demanding more tailored risk management services, including claims advocacy, analytics, risk control consulting and industry-specific insurance products.
At Marsh McLennan Agency, Balentine said the company is expanding its proprietary solutions strategy in collaboration with Victor, the managing general agent owned by Marsh McLennan. The initiative aims to develop industry-specific insurance programs and bespoke products designed around specialized client needs.
“We have large market share in a number of industries, and we want to take a hard look at where we can bring something more meaningful to those clients… something more robust than a standard insurance product,” Balentine said.
Looking ahead, he warned businesses not to become complacent during the softer market cycle. One of the most important steps companies can take, he said, is improving the quality and transparency of underwriting data shared with insurers.
“There’s now an expectation in the industry that all relevant data should be accessible,” Balentine said. “Having high-quality data will become increasingly important for securing the best terms, conditions, and pricing.”
He also encouraged businesses to continue evaluating alternative risk financing structures such as captives, group captives and loss-sensitive programs, even while guaranteed-cost pricing remains attractive.
“The temptation in a soft market is to simply bank the savings and ride the wave of lower guaranteed-cost pricing,” the Marsh McLennan Agency leader said. “But building alternative risk solutions gives businesses more control and more stability over time, especially as they grow. Because eventually the market always shifts back.”
