Understanding market trends is the first step to controlling insurance costs. According to Hylant’s risk advisors, organizations that take a proactive approach to risk management, loss control, and coverage strategy are better positioned to secure favorable terms in an evolving commercial insurance market. The five trends below highlight what’s shaping the landscape, and how organizations can stay ahead.
1. Social Inflation and Litigation Trends
Social inflation, claim costs rising faster than economic inflation, continues to significantly impact liability lines. Increased third-party litigation funding, shifting jury attitudes, and heightened anti-corporate sentiment have fueled a rise in nuclear verdicts, defined as awards exceeding $10 million. As a result, insurers are raising premiums, tightening coverage terms, and closely scrutinizing risk quality.
“We’re seeing juries send a message to corporations, even in cases that historically would have settled for far less,” says Denise-Wade Jackson, Claims Practice Leader/Litigation Manager. “Organizations that ignore documentation, training, or safety culture are at far greater risk of becoming targets.”
To mitigate exposure, organizations should strengthen incident documentation, reinforce safety and training programs, engage legal counsel early, and invest in transparent governance and reputation management.
2. AI and Technology Exposures
Artificial intelligence (AI) adoption is accelerating, but it introduces new liability and operational risks. Algorithmic bias, improper data use, and automation failures can trigger directors and officers, employment practices liability, professional liability, and cyber claims. Insurers are increasingly evaluating how organizations govern AI use, manage data privacy, and maintain oversight of technology-driven processes.
“AI can be a competitive advantage, but only if an organization can prove it’s using the technology responsibly,” explains Brent Brinkman, IT Operations & Security Leader. “Carriers want to see documented oversight, not just innovation for innovation’s sake.”
Effective mitigation includes establishing formal AI governance policies, strengthening cybersecurity controls, maintaining human oversight in high-risk decisions, and training employees on appropriate AI use and limitations.
3. Inflation and Supply Chain Volatility
Rising construction costs and ongoing supply chain disruptions continue to increase claims severity and prolong recovery timelines. These conditions heighten the risk of underinsurance, particularly when property values and business interruption exposures are based on outdated data. Insurers are responding with stricter valuation reviews and more rigorous underwriting.
“We continue to find that many properties are undervalued, and business interruption exposure is poorly quantified,” notes Patrick Armour, VP Risk Advisor, Property Loss Control. “Organizations can’t rely on outdated numbers anymore; the cost to rebuild and recover operations has changed dramatically.”
Mitigation strategies could include conducting formal property valuations, applying annual indexing, assessing critical equipment replacement timelines, and validating business interruption limits through formal evaluations. Strengthening business continuity planning and diversifying suppliers can also improve resilience.
4. Cybersecurity Threats and Fraud Risks
Cyber threats are becoming more sophisticated, driven by AI-enabled attacks, ransomware, deepfakes, and social engineering schemes. Business email compromise and fraudulent payment instructions remain leading causes of severe financial losses. Insurers are responding by increasing security requirements and demanding greater visibility into cyber risk controls.
Mitigation strategies include implementing multifactor authentication, conducting regular penetration testing and phishing simulations, maintaining secure and immutable backups, and establishing clear vendor verification and fraud escalation procedures.
5. Underwriting Discipline and Capacity Management
While pricing has stabilized in some lines, insurers remain disciplined. Many continue to limit capacity and prioritize organizations that demonstrate strong risk management practices. Those lacking formal processes, accurate data, or a strong safety culture may face higher premiums or restricted terms.
“The biggest differentiator we see is preparation,” emphasizes Nick Fratalonie, Associate Chief Insurance Officer. “Clients who document their risk management efforts consistently tend to secure better outcomes at renewal.”
Organizations can improve outcomes by developing a comprehensive risk narrative, promptly addressing loss control recommendations, starting renewal discussions 120–180 days in advance, and considering alternative program structures such as higher deductibles or captives.
