Commercial insurance clients facing stubborn casualty increases are being encouraged to test captives, higher deductibles and alternative collateral arrangements as brokers search for more control over difficult renewals.
The discussion is gaining urgency as the US commercial market moves in different directions. Property and several financial lines remain competitive, while commercial auto, umbrella and excess liability continue to face pressure from worsening loss costs and larger verdicts.
Mary-Beth Hahn (pictured), executive vice president and North American P&C leader for commercial lines at HUB International, said brokers need to examine the client’s entire insurance account rather than respond to each line in isolation.
“We typically have what we call a renewal strategy with our clients,” Hahn told Insurance Business. “Some of the renewal dates are the same, but if they’re bifurcated, we say: Look at the program in totality.”
HUB expects property rates to remain competitive through the rest of 2026, supported by a relatively stable reinsurance market and the absence of losses significant enough to disrupt capacity so far.
This environment gives brokers an opportunity to recover deductibles, limits and coverage enhancements surrendered during the hard market. Savings can also be redirected toward casualty programs where pricing and capacity remain more challenging.
Hahn described casualty conditions as “a little choppy,” with workers’ compensation offering some relief alongside property. However, commercial auto and umbrella insurers remain cautious as losses continue to penetrate higher layers.
“There is capacity out there, but we still see the losses coming in,” she said. “Underwriters are being cautious because they’ve seen loss trends of about 12% to 15% that they’re adding into those losses. The underwriters are being really careful about protecting their reserves.”
Some insurers that previously supplied lead umbrella capacity are reducing the limits they will deploy. Brokers may consequently need to assemble towers using more carriers, increasing the time and complexity involved in completing placements, Hahn said.
Program restructuring is becoming a larger part of the renewal process. A client that previously purchased guaranteed-cost coverage, for example, may be asked to consider a deductible program.
Brokers can also test different retentions and attachment points using the client’s own loss experience rather than relying solely on industry averages. “Having those options means you can really evaluate the trade-offs and look at our clients’ overall budgets to achieve the best result for them,” Hahn said.
Workers’ compensation can also be included in a broader casualty placement. Hahn said HUB has explored whether a single insurer could write workers’ compensation, auto liability and umbrella coverage for certain clients, giving the carrier a larger share of the account while simplifying the management of claims that could involve several lines. The line remains competitive, according to Hahn, although the scope for further price reductions may be narrowing; HUB’s midyear outlook placed workers’ compensation rate movement in a range of -5% to -5%.
Alternative risk solutions are increasingly entering the conversation when traditional capacity becomes expensive or a client’s exposure changes materially. Hahn said an acquisition, expansion or shift in operations can alter a company’s profile enough to make its existing insurance structure less effective.
Amid growing demand, HUB appointed Ellen Sue Bernards to manage its Alternative Risk Solutions practice in January. The brokerage is examining captives alongside alternative forms of collateral for casualty programs, including bonds and substitutes for traditional letters of credit.
Parametric coverage is also being assessed with property specialists where a measurable trigger, such as hail, could address an exposure that is difficult to place conventionally. Hahn said clients sometimes dismiss these structures because they appear too complex or assume they lack the internal expertise to manage them.
“What we like to say is: ‘Investigate that,’” she said. “At the end of the day, you may remain with a traditional program, but it’s incumbent upon you to evaluate what’s in the marketplace. Those opportunities do exist in both of those program areas.”
