“Supply chains, globally, have become increasingly complex and their fragility has been underscored by a series of geopolitical shocks in recent years,” Parker said. “AI offers the potential for us to better understand our clients, to track the movement of goods and the aggregation of exposures in real time.”
Short-tail pricing, which peaked in early 2024, began to decline mid-year. However, Hurricane Milton, a Category 3 storm that made landfall in Florida in October 2024, along with flooding in Eastern Europe, could stabilize or reverse this trend in 2025, S&P said.
The findings emphasize the need for proactive infrastructure planning, particularly in flood-resistant construction, as climate change leads to more unpredictable weather patterns. The rising risks of drought, localized flooding, and water stress further emphasize the importance of strategic risk management to safeguard both people and property, the report noted.
The report, “Outlook on AI-Driven Systemic Risks and Opportunities,” examines how AI could transform both offensive and defensive capabilities in cybersecurity. Of particular concern is AI’s potential to create more sophisticated polymorphic malware that can continuously evolve to evade detection, potentially leading to longer-lasting and more damaging attacks.
“The general optimism among insurers and reinsurers about DUAEs persists, with more strategic partnerships being formed between carriers and DUAEs,” said Yizhou Hong, senior financial analyst at AM Best. “These partnerships are generally longer-term and allow capacity support across lines of business, industries, and geographies, instead of simply by program.”
Tasked with navigating an ever-evolving risk environment, the cyber insurance market has distinguished itself by its ability to pivot at speed, alongside its early adoption of proactive products and solutions. So, with 2025 in the near distance, what are some of the top trends shaping the sector – and what is the next year likely to hold for the market?
“It is my belief that we are at the beginning of a global parametric insurance revolution,” Meier said. “Parametric is the lead violin in a symphony of risk transfer. The ability to work with large, respected MGAs like Rokstone, to provide worldwide access to parametric solutions that utilize both public and proprietary data backed by Lloyd’s capacity, is an important step in the widespread mainstream adoption of parametric products.”
McKinsey highlighted that rising costs, including repair expenses and reinsurance premiums, have brought affordability into focus, particularly in the U.S. Insurers are encouraged to innovate and expand coverage in underinsured regions, especially in parts of Latin America and Asia, where economic conditions may support greater insurance uptake.
With over 45 years of experience in the global insurance sector, Bensinger has held senior roles at companies including AIG, The Hanover Insurance Group, Combined Specialty Group (then part of Aon), Chartwell Re Corporation, and Skandia America Group. He was also a partner in the insurance practice of Coopers & Lybrand, now PwC.
Commercial insurance pricing remains elevated in the region, with the composite price index increasing 3% in the third quarter of 2024, exceeding the global average, which declined by 1%. Casualty lines, particularly motor insurance, have driven pricing increases due to higher vehicle values and rising repair costs.
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