The excess and surplus lines (E&S) construction insurance market has experienced quite a prolonged soft market cycle in the past decade. Pricing has been relatively depressed, and buyers have enjoyed a number of years with favorable policy terms and conditions. However, in trend with wider property and casualty market firming, the tide in E&S construction is slowly turning. That’s thanks to some significant wildfire losses in the past few years and ongoing challenges with New York construction.
Ultimately, insurance carriers can only write down reserves for so long until they have to replenish their savings accounts. That’s where the E&S construction market is at right now. But in the casualty space, construction remains relatively healthy. Carriers are pressing for a little bit of rate to replenish their reserves, but these increases are nowhere near as dramatic as they are in some other lines.
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