Kevin Collins (pictured) has been in the architects and engineers professional liability market long enough to have navigated multiple challenging cycles. His read on the current environment is straightforward: this one is different.
"I feel like we're in a kind of a new normal rather than something that we can say, OK, it's going to take some time, but there's some solutions to be able to drive that," said Collins, A&E practice leader at Victor, in an interview with Insurance Business. "This cycle feels a little bit longer."
The data supports that assessment. Drawing on its claims experience and one of the largest A&E portfolios in North America, Victor found that average claim severity increased approximately 62% in the US and 64% in Canada between the rolling ten-year periods of 2006–2015 and 2016–2025, measured in nominal dollars. Even after inflation, average severity still rose 19% in the US.
Placing the current environment in historical context, Collins was direct. "I think it is the most challenging. The mid-80s still may be kind of the Mount Everest of hard markets, where capacity, frequency and higher severity were all part of that market dynamic." The challenge today is not necessarily a traditional hard insurance market characterized by reduced capacity and sharply rising premiums. Rather, insurers are confronting persistently higher claims costs even as competitive market conditions continue to influence pricing.
The nuclear verdict issue is not the only factor driving the current severity environment. Something more pervasive is.
"What we're seeing is an increase in average claims but claims that generically have been maybe five-figure or six-figure settlements are now turning into million-dollar claims or multimillion-dollar claims," Collins said. "It really is that dynamic."
Several forces are operating simultaneously. Construction material costs that surged during COVID have not reverted. "COVID, it went up and it was changing dramatically in real time and it never really came down," Collins noted. The cost to replace drywall, steel, and structural components has remained elevated permanently, meaning any error on a project costs more to fix than it once did.
Defense costs are being driven up not only by attorney rates but also by how long claims spend in the judicial system. Where average claim resolution once ran around 24 months, it has crept to 30, 32, and 33 months based on industry claims data. Every additional month means more attorney hours, more expert witnesses, more pre-trial preparation - all accumulating before a dollar of indemnity is paid.
Social inflation is compounding both. Collins describes the plaintiff's bar as increasingly coordinated across jurisdictions - sharing strategies, successful arguments, and expert witness combinations. "So we've got a great result here in Mississippi. Is there a way that we can make the argument in Pennsylvania?" That cross-pollination is raising the floor on what any given claim costs to defend, and raising the ceiling on what a jury might award.
Swiss Re Institute research published in September 2024 found that social inflation had increased US liability claims by 57% over the prior decade, with annual social inflation reaching approximately 7% in 2023. Third-party litigation funding has expanded sharply alongside it - assets under management in the sector grew to $16.1 billion in 2024, per US Chamber of Commerce data - giving plaintiff counsel the financial runway to pursue cases that would previously have settled early.
Collins is candid about the difficulty of resolving these factors. "How do you prevent the gyroscope from just continuing? We can identify the factors, but having a consistent message in the marketplace - whether you're on the carrier side, the underwriting side, the broker side, or the client side - is still where we're at right now,” he said.
Structural engineers have historically carried the most severe claims profile in the A&E space, and that has not changed. The Ames and Gough 2026 A&E professional liability survey found 80% of responding insurers ranked structural engineering among the three disciplines with the highest claim severity. Victor’s own claims experience, however, shows that severity varies considerably across disciplines, with environmental consultants and civil engineers also experiencing significant losses. Collins is clear on what that means for brokers: "If I'm a broker handling a structural engineer, nothing changes. They need to have strong risk management practices, they need to negotiate favorable contracts, they need to recognize that they're going to pay more than the average in the industry."
But two other disciplines are shifting in ways brokers need to register.
Civil engineers, historically a more favorable risk profile than architects, may be experiencing a meaningful shift in bodily injury exposure. Collins described the claim type directly: a pedestrian or cyclist is struck in a crosswalk, and the engineer who designed the roadway a decade ago becomes a named defendant. "We're just seeing that more prevalently." That exposure - design liability attaching to physical harm years after project completion - represents a genuine change in the civil engineer's risk profile that pricing assumptions may not yet reflect.
Mechanical engineers may represent an even more significant shift. Post-COVID attention to air quality, HVAC complexity in data centers, and the demands of new facility types have changed what mechanical engineering work looks like and how it can fail. "Our experience was very favorable relative to that baseline for architects, but we're finding that their exposure and severity risk is actually more in line with an architect than what we've historically done," Collins said. Brokers placing mechanical engineering accounts on favorable terms based on historical assumptions should be revisiting those.
Collins is pointed about where broker value lies in this environment.
"I really kind of focus on the risk management side of it because I think it's tough for underwriters to identify a firm within an 8.5 by 11 piece of paper." What underwriters at Victor and across the market are increasingly scrutinizing is evidence of how a firm actually operates - its internal review processes, contract management practices, and quality control culture - not just what projects it works on.
"Brokers finding time to be able to differentiate special aspects within the firm or reaffirming their quality control, risk management, internal systems, review of contracts - things that may be taken for granted in the marketplace - highlighting those is super important,” he said. “Not just for structural engineers, but for mechanical, civil, or architect, or really any firm."
A well-documented submission that goes beyond the standard application to demonstrate how a firm manages risk may be more favorably received than a comparable firm's application that does not. The differentiation matters now, but it pays the highest dividends when the market tightens further.
"If they're doing it consistently, when the market changes, now they have some higher leverage to be able to negotiate a little bit more effectively," Collins said. The broker building that case for clients today is earning leverage that will matter when this cycle turns - and the factors driving the current environment suggest that turn is not imminent.
