WTW-2024年第三季度全球建筑率趨勢報告 Global construction rate trend report

Globalconstruction

ratetrendreport

Q3September2024

wtw

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Globalconstructionratetrendreport

Thisupdateanalyzesour

observationsofthecurrentmarketconditionsfortheconstruction

insurancemarketplace.Allrate

changesareforguidanceonlyandwillvarydependingonriskprofileandindividualcircumstances.

Introduction

Wearenowobservingcapacitylevelssimilarto

thoseseenatthetopofthelastsoftmarketcycleinearly2019inmostregionsintheconstruction

insurancemarketandinmostcommerciallinesofbusiness.Weexpectthispositivetrendtocontinueduringthesecondhalfof2024andinto2025.

Thisisduetoincreasedinterestfrominsurers

inmaximizingdeploymentoflocalcapacity

alongwithaninfluxofnewcapacityasentrants

establishthemselves,includingrenewed

interestfrominternationallybasedinsurersandreinsurersandreturningformermarketplayers.

Thiscompetitiveenvironment,combinedwiththeneedformarketstogrowtheirmarketshareisexpectedtoincreaseappetiteandimprove

termsandconditionsavailabletoclientsasweapproachtheendof2024.Thiswillalsohelp

alleviatetheneedforsignificantrateincreasesdespiteongoingindustrychallengessuchas

highinterestratesandpersistentinflation,

lackofspecializedworkforceanduncertaintyonclaims,rebuildingandlitigationscosts.

Consequently,pricingacrossmostregions

andproductlinesisexpectedtoremainstablethroughout2024.Thisstabilitywillresultin

favourablesingle-digitdiscountsforcertainhigh

premiumvolumeprograms,renewals,andone-offprojects.Inthesecases,theclient’sreputation,

lowlosshistory,long-standingrelationshipwith

theinsurersandcomprehensiveriskcontrolsis

fundamentaltoachievingthebestresultspossible.

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Weremainconfidentthatthispositivemarket

developmentwillalsoincreaseinterestinmore

aggressiveleadinsurerstoseeanopportunity

to“stepup”andfillinsomeofthegapsweare

seeingparticularlyinlargeandcomplexCAR/

EARrisks,inheavycivils,andinProjectSpecific

ProfessionalLiabilityandInherentDefectInsurance

(IDI)coverages.Thisisespeciallyrelevantin

Europe,AsiaandAustralia,aswellasautoliabilityandleadumbrellacasualtylinesintheU.S.

However,thecontinuedimpactofnatural

catastropheeventsremainsamajorconcern

andchallengeinheavilyexposedterritories,

particularlyforwindstormsintheCaribbean,

andGulfofMexico,theU.S.EastCoastandpartsofAustralia,AsiaandLatamwhichalsofaces

the"LaNina"effectthisyear.Insurersarestill

carefullymanagingtheirpricingandcapacity

aggregationsintheseareas,includingsecondaryperilslikewildfires,floods,cyclones,andhail,

whichaffectmanycountriesworldwide.ThereisacloseemphasisonlocationsinEurope

andintheAmericaswhichhasalsoledtoa

higherdemandfordetailedprojectinformationandagreateremphasisonriskmitigation

strategies,riskprofilingandmodelling.

Volatilityinsomeindustrysectorsandterritories,

duetorecentlargelosses,theneedformore

robustcoverageconditions,andalackof

Nat-Catcapacityisopeningopportunitiesin

somelocalmarketsthatwerehistoricallyself-sufficient.Thesemarketsareseekingregionalandinternational/Londonreinsurancecapacityandsupport,whichisattimesneededand

welcomedtocompleteandcompeteincertainrisks,particularlyinEuropeandLatam.

Overall,realconstructiongrowthwillbedriven

byenergyandutilitiesandinfrastructure

construction,whichareexpectedtogrowby7.8%and5.1%respectivelyin2024.Globally,

infrastructureandenergyandutilitiesconstructionhaveexperiencedthelargestgrowthcompared

totheirpre-pandemiclevels,withenergyandutilitiesconstructiongrowingby34%and

infrastructuregrowingby33%comparedto2019levels,accordingto

GlobalData

.Conversely,

theresidentialsectorwillcontinuetostruggle

throughouttherestof2024andisexpectedto

declineby3.2%globally,accordingto

GlobalData

.

Thisyear’selections,whichwillimpacthalf

oftheworld’spopulation,issettoreshape

globalpoliticsandcoulddelay,cancelordilutenumerousprojectsuntilthepoliticallandscapebecomesclearer.Thisshiftcouldsignificantly

impacttheconstructionindustryinkeycountries

includingIndia,France,theUK,Mexicoand

U.S.,dependingontheelectionoutcomes.

Witheconomichardshipsoprevalent,manypoliticiansareofferingto“spendbig”and

cuttaxesinabidtogainpower,potentially

exacerbatingglobaldebt,whichisalreadyatrecordlevelsaftersubstantialpost-pandemicstimuluspackagesinwealthyeconomies.1

Despitetheuncertaintiessurroundingelections,theconstructionindustryissettoexperience

promisinggrowth,particularlyininfrastructureprojects.Thisincludesboththerefurbishmentofaginginfrastructureandthedevelopment

ofnewprojectssuchasroads,railways,

airports,ports,andurbanmobilityprojects.Theenergysectorisalsoexpectedtoexperience

withsignificantgrowth,predominantlyinrenewablesasenergytransitionprojectscontinuetobeapriorityinmostregions.

Wealsoanticipateheavyinvestmentinthemanufacturingsector,particularlywithin

technology.Significantfocuswillbeonthe

developmentofprojectsincludingsemiconductor

facilities,gigafactoriesanddatacentres

acrossvariousregionsmostnotablyinNorthAmerica,LatinAmericaandEurope.

Thecurrentincreaseinmarketcapacityandcompetitionsuggestsapositiveoutlookastheyearends.Althoughimmediatechangesintermsorpricingmightnotbesignificantduetocautiousunderwriting,weexpect

morenoticeableadjustmentsin2025and

beyond.Thisevolvingenvironmentpresentspromisingopportunitiesforclients,given

carefulnavigationofmarketdynamics.

Qualityunderwritinginformationandastronglosshistoryarecrucialforachievingoptimaloutcomes.Inthiscontext,brokersaremoreessentialthan

ever.Theyplayavitalroleinpresentingrisksto

insurersandprovidinganalyticaldatathatguidesmarketstowardthemostsuitablesolutions

andprogramdesigns.Effectivemanagementandstrategicinsightarekey;withoutthese,

clientsriskfacingpolicyrestrictionsorhigherratings.Brokers'expertiseensuresthatclientssecurethebestpossibletermsandconditions,aligningwithallstakeholders'expectations.

1

/graphics/GLOBAL-ELECTIONS2024/gdvzmkejkpw/

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Globalconstructionratetrendreportbylocation

Clickonlocationfordetails

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Keytakeaway

?Inthefaceofpersistenteconomic

headwinds,theresilienceofthe

insurancemarketisnoteworthy.

Recentadjustmentshavefostered

improvedlossratiosandamorestablerateenvironment,demonstratingthesector'sadaptability.

?Theinsurancelandscapeisevolvingwithnewmarketentrantschallengingthestatusquo.

?Inthefaceofevolvingindustrytrends,contractorsdealingwithhigh-risk

constructionexposuresarefindinginnovativewaystomanagerisk.

?Contractorsareprioritizingemploymentpracticestoattracttalent,investing

intrainingforqualityandsafety,and

adoptingtechnologyforriskmitigation.

?Theconstructionindustryispoisedforatransformativeperiodasweheadintothesecondhalfof2024andbeyond.

NorthAmerica

Workers

compensation

Flatto+5%

+

Professionalliability

Flatto+5%

Non-High

HazardNatCatProjectSpecificBuildersRisk

+5%to+10%

Ratemovement

Generalliability

+5%to+15%

Umbrella(lead)

+5%to+15%

Projectspecific/

controlledinsuranceprogramsforexcess

Flatto+10%+5%to+30%

HighHazard

NatCatProject

SpecificBuildersRisk

+10to+20%

Autoliabilityandphysicaldamage

+10%to+15%

Excess

+10%to+15%

+

SubcontractorDefaultInsurance(SDI)

Flatto+5%

+

MasterBuildersRisk/ContractorsBlock

+5to+10%

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Regionalinsights

Themarketiscurrentlywell-equippedand

confident,withsufficientcapacity,appropriateattachmentpoints,andadiversifiedportfolio.

Theconsensusintheindustrysuggeststhattheglobalrisk-adjustedreinsurancerenewalrates

haveremainedstableasofthispastJanuary,

supportedbysubstantialcapitalthatmeetsthemarket'sdemandunderthe2023termsand

conditions.AccordingtotheSwissReGlobal

CATBondPerformanceIndex,thereisanotable

investorinterestinCATbonds,whichhaveyieldedreturnscloseto20%3,fosteringamorelucrative

reinsuranceclimate.

Despiteongoingchallengessuchaslabor

shortages,supplychaindisruptions,rising

claimcosts,anduncertaininterestrates,recentmarketadjustmentshaveledtobetterinsurer

lossratiosandamorestablerateenvironment.

Contractorsandtheirbrokersfacetheongoing

taskofbalancingpersistentrateincreasesdriven

byinflation,litigationcosts,andrisingnuclear

verdicts,withthespecificlossexperiencesandriskmanagementstrategiesofeachaccount.

Therehasbeenanoticeableadversedevelopmentinautoliabilityfrom2015onwardsandingeneralliabilityfrom2016to2019,with2019marking

theleastfavorableyearforbothcategories.

Furthermore,areportbyMarathonStrategies

indicatesatrendtowardsthepeaklevelsof

corporatenuclearverdictsseenin20194,wherelossesexceeded$10million.

Theautoliabilityandleadumbrellalinescontinuetobeproblematic,withtheinitial$10millionin

limitsoftenconsideredthemostactive.However,theemergenceofnewmarketplayerstargeting

lowtomoderateriskprofilesorhigherexcess

layershasintroducedcompetitivepressureon

establishedmarkets,leadingtomorefavorable

rateoutcomes.Asthesenewcomersexpandtheirmarketshareandappetite,increasedcompetitionisexpected,whichcouldhelpalleviatetheneedforrateincreases.

High-riskconstructiongroupsremainanexceptiontogeneralindustrytrends,facinglimitedmarket

appetiteforhigh-severityrisks,whichareoften

subjecttohigherratesandretentionlevelsalong

withcapacitylimitations.Contractorsinthis

segmentareexploringalternativerisktransfermethodsandcaptivesolutions.Effectiveearlycommunicationandstrategicmarketingare

essentialtosetandmeetproperexpectations,

withthemostsuccessfuloutcomesofteninvolvingactivecontractorparticipation.

Contractorsareincreasinglyfocusingon

employmentandhiringpracticestoattractand

retaintalent,investingintraininganddevelopmenttoensureallteammembersarewell-prepared

withthenecessaryknowledge,resources,tools,

andtechniquestosafelyandefficientlycomplete

projectswithoutdefects.Althoughtraditionally

slowtoadoptnewtechnologies,theconstructionindustryisnowshowingaheightenedinterestandinvestmentintechnologicalsolutionstoaddress

laborshortages,enhanceoperationalefficiencies,andcapturedatamoreeffectively.Largerandmoresophisticatedcontractorsareusingtechnology

toreducelosses,relyingondataanalyticsand

performanceindicatorstoimproveoutcomesandenhanceriskprofiles.

3

SwissRecatbondindexhitsrecord19.69%total-returnfor2023',Artemis,January2024

4

CorporateverdictsgothermonuclearReport',MarathonStrategies,2023

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Theindustryisexpectedtoincreasinglyutilize

technology,withagrowingadoptionofdrones,

wearables,androbotics.Theuseofartificial

intelligence(AI)androboticsisalsoexpandingas

contractorsstrivetomeetgrowthobjectivesand

addresssuccessionplanningchallengesinalabor-constrainedenvironment.

Asafinalpoint,andacontinuationof2023,

weanticipatesignificantactivitywillcontinue

through2024primarilyininfrastructure(roads,

bridges,airports,alternativeenergy),renewable

energy,industrialmanufacturing,(semi-conductorchipplants,EVbatteryplants,datacentersand

distributionfacilities)andhealthcare(hospitals).

Assuch,weexpecttoseemorejointventure

arrangementsandalternativecontracttypes,suchasP3andEPCcontracts.

Lookingforward

Theconstructionsectorisincreasinglyleveragingtechnologytobridgelaborgapsandenhance

operationalefficiencies.Thisadoptionisexpectedtocontinuegrowing,withmorewidespreaduseofAI,drones,androbotics.Theseadvancementsnotonlyhelpinmanagingcurrentchallengesbutalsoindrivingfuturegrowthandsustainabilityinthe

constructionindustry.

Capacityinsights

Umbrella/excessmarkettrends

Theumbrellaandexcessinsurancemarketshaveshownatrendtowardsstabilizationoverrecent

years,apatternthatisexpectedtocontinue.

Insuredswithlow-to-moderateriskprofilesandapositivelosshistoryarelikelytobenefitthemost,asreducedcompetitionamongsupportedlead

capacitydrivesfavorableoutcomes.

Asthemarketevolves,increasedattachment

pointsandconsistentyear-over-yearratehikeshavespurredcompetition,particularlyforlowerhazardclasses.Thiscompetitionoftenresults

inmoreattractivepricing.However,therate

adjustmentsmayvarydependingonthelevelofexposureandlossexperience.Forinstance,contractorswithincreasedexposuresand

favorablelosshistoriesmightseetheirratesremainstableorevendecrease.Conversely,

reducedinsurerappetiteorcapacityconstraintsintheinsurancetowercouldleadtorateincreases,

typicallyinthemid-to-uppersingledigits.

Forhigherhazardrisks—suchaslargeautofleets,NewYorkconstructionoperations,residential

projectsforsale,wood-frameconstructions,

andtradesinvolvedinhigh-riskactivitieslike

demolition—themarketremainschallenging.

Insurersareparticularlycautious,oftenleadingtolimitedmarketoptionsandhigherratesthroughtheexcesslayers.

Buildersriskmarketdynamics

Thecommercialconstructionsector'sbuildersriskinsurancemarketisshowingsignsofrecoveryfromthetoughadjustmentsofthepreviousyear.Whilerateincreasesarestillonthehorizon,theyare

notassevereasbefore.Themarketisbeginningtoseemorecapacity,indicatingpositivetreaty

reinsurancerenewals.Quota-sharearrangementsarebecomingmorecommonforlargerrisks,andunderwritingcontinuestobestringentforperilslikewildfiresandseverewinds.

NewlegaldevelopmentshavepromptedthemarkettoreconsiderLEG3coverage,withmostinsurers

expectedtoadjusttheirpolicytermsaccordingly.

Thecapacityforwoodframeconstructionsremainsstable,dependentonrobustsecuritymeasuresandriskmitigationstrategies.However,bothprimary

andexcessnaturalcatastropes(NatCat)capacitiesarestillrecoveringfromachallenging2022.

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Coverage

Project-SpecificProgramsandControlledInsurancePrograms(CIPs)

ConstructionProjectInsuranceisbeginningto

experienceastabilizationafteralong,rockyhard-marketcycle.Itissafetosaythatthisstabilizationislargelyduetothenewnormofwitnessing

massiveconstructionprojectsreadilyintroducedintotheinsurancemarketplace.Coverageand

limitsremainreadilyavailableformostproject

typesandcarriershavebeeneagertofavorably

rateCIPsexcitedforanopportunitytobeaplayeronthisnewfieldofgrowth.Therehasbeena

jumpinspendingondatacenterconstructionaswellaslifesciencefacilitiesbothbeingdesirablerisksfortheinsurancemarketplace.Additionally,

severalmegamanufacturingprojectsremaininthepipelineforthisyear.5

Theexceptiontothisfavorableplacementresultcontinuestoliewithfor-saleresidential,coastal,masstimberorwoodframebuilds.Despitethechallengestheseconstructionrisksface,thereisnotatrendofdecreaseintheseprojects

beingintroduced.Interestingly,thereductionin

constructionspendappearstobeinthetraditionalnonresidentialspacewhileofficeconstruction

spendingremainedflatandhighway&streetspendingslightlydecreased.6

Aswithearlierin2024,thelackofcounterbalancefromthelesscomplexplacementsiscausing

greaterscrutinyfromthemarketsrequiringmoredetailedunderwritinginformation.ForNatCat-

exposedareas,projectinsurancemarketscontinuetoplacespecialunderwritingattentiononheavy

storms,wildfires,andflooding.

Itisimportanttopointoutthattheconstructionindustryisstilldealingwithchallengessuchasincreasedinterestrates,risingcostofmaterials,shortagesofskilledlabor,andoperational

efficienciesparticularlywiththegrowinguse

ofAI.Forthesereasons,buyersofconstruction

insuranceexpectalternativesolutionsforcoveringtheirriskasanavenuefordecreaseinfinancial

burden.ThestabilizationofratesforOCIPS,CCIPS,andotherprojectspecificprogramscontinuesto

allowforoptimalinsurancecoverage,streamline

claimshandling,andsavingsforallpartiesinvolved.

Auto

Autoliabilityremainsasignificantchallenge

acrossvariousindustries.Eventhoughthe

NationalHighwayTrafficSafetyAdministration

(NHTSA)reportedadecreaseintrafficfatalities

in2023despiteanincreaseinmilesdriven,the

autoinsurancesectorcontinuestostrugglewithprofitability7.AccordingtoareportfromThe

InsuranceInstitute,autolosseshaveescalatedby

15%since2020,whilepremiumshavedecreased

by13%8.Thistrendunderscoresasignificantriseintheseverityofclaimsoverrecentyears.

Additionally,factorssuchassocialinflation

andtherisingcostofmaterialsareincreasingly

influencingtheadjustmentofautoclaims,furthercomplicatingthelandscapeforinsurers.

5ConstructionDive,7/18/2024

6

AssociatedBuildersandContractors'analysisofU.S.CensusBureau,8/1/2024

7

NHTSAEstimatesTrafficFatalitiesDroppedintheFirstThreeMonthsof2023,NHTSA)June2023

8

U.S.AutoInsurerClaimPayoutsSoarDuetoIncreasingInflation',InsuranceInformationInstitute,September2023

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Generalliability(GL)

Generalliability(GL)insuranceformany

contractorshasmaintainedalevelofstability.Assupplychainshavegraduallyalignedwith

demand,theurgencytoadoptalternative

buildingmaterialsandmethodshasdecreased.

Thisalignmenthaseasedsomeofthepressures

contractorspreviouslyfaced.Despitethis,there

remainsastronginterestinexploringinnovative

constructionapproacheslikemodularconstructionandmasstimber,particularlyinareasexperiencingpopulationgrowth.However,thestabilizationof

supplychainshasmadecontractorsmorecautiousaboutassumingrisksassociatedwiththesenew

methods,especiallywhenprojecttimelines

andbudgetscanbemoreaccuratelyforecasted.Thiscautiousapproachisreflectedinthe

routineinclusionofumbrella/excess,cyber,

andPerfluoroalkylandPolyfluoroalkylSubstances(PFAS)exclusionsinrenewalprograms,

indicatingapreferenceformorepredictableoperationalframeworks.

Workers’compensation

Workers'compensationremainsoneofthemoststableandreliablesectorswithinthe

propertyandcasualtyinsuranceindustry.It

consistentlyoutperformsothermajorlinesdue

toitspredictabilityandsecurity.Despiteongoingtrendsthathaveledtoreductionsinstaterate

classifications,risinglaborcostscouldpotentially

offsetthesereductions,impactingoverallcostsavings.

Moreover,thelandscapeofworkers'compensationisalsoinfluencedbyincreasingclaimcostsand

heightenedlitigationactivities,particularlyin

stateslikeCalifornia,NewJersey,andNewYork.Thesefactorsaresignificantlyaffectingthewayinsurersassessandapplyratingmethodologies.

Professionalliability(PL)

Professionalliability(PL)insuranceinthe

constructionsectorcontinuestobecompetitive,

maintainingstablepremiumratesforabroad

rangeofexposures.Insurerscontinuetoexercise

cautionwithmanagingtheircapacityandretention

levelsforbothongoingpracticepoliciesandproject-specificcoverage.

Availablecapacityforcontractors’risks

Thetotalcapacityformostcontractorrisksin

theU.S.remainsrobust,exceeding$300million.ThiscapacityisbolsteredbycontributionsfromnewmarketentrantsandadditionalcapacitymaybeaccessiblethroughmarketsinLondonand

Bermuda.However,capacityforproject-specificplacementsismorelimitedasmanyinsurers

reservethisforpracticeorannualclients.

Insurerstypicallyofferaminimumof$10millionperrisk,withsomeabletoprovideupto$25

million.Mostinsurerslimittheamountofcapacitydeployedforanysinglerisk.

Lesscapacityisavailableforcontractorswith

substantialdesignresponsibility,especiallyif

designisperformedin-house,asfewerinsurersarewillingtoengageonaprimarybasisfortheserisks

comparedtothoseinvolvingsubcontracteddesignservices.

Retentionlevelsaregenerallystableunlesstheyfallbelowthemarketstandard,andtheyare

influencedbythesizeoftheinsured'sbusinessandlimitdeployment.

Marketdynamicsandrateimplications

Adequatecapacityandcontinuedcompetition

aregenerallykeepingrateincreasesminimalcomparedtootherpropertyandcasualty

(P&C)lines.

However,thereisupwardpressureonratesfor

certainrisks,suchasthoseinvolvingasubstantialamountofexposuretodesign-buildprojects,

whethertheyincludein-housedesignornot.Rateincreasesaretypicallybelow5%forriskswitha

cleanlosshistory,thoughratescanbeinfluenced

bysignificantchangesintheratingsbasis(revenue)andrevenuecategories.

Coverageavailabilityandterms

Mostcoveragesareavailablefrommostinsurers,

althoughapproachescanvary,especially

concerningcertaincoverages.Insurersassesseachriskindividually,focusingoncontractualcontrolsandtheprequalificationofdesigners.Attentionisoftenrequiredforspecificcontractandpolicylanguage,includinglimitationsof

liabilityprovisions.

Insurersarecarefultodistinguishbetween

productdesign,processdesign,andconstruction/

installationdesign,asdesigner/contractor

programsareintendedforconstruction-relatedrisks.Someaspectsofproductdesignmaybecoveredundertheseprograms.

Project-specificcapacityandlong-termpolicyterms

Manyinsurersreservetheirproject-specific

capacityforcurrentclientsonannualpractice

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programs.Totalpolicyterms(policyperiodplus

extendedreportingperiod)of15yearsarewidely

available,withlongertermsavailablefromaselectfewmarkets.Thereisatrendtowardaligningthesetermswiththelesseroftheapplicablestatestatuteofreposeorcontractualrequirements.

Capacityfordesignprofessionals,particularlyondesign/buildinfrastructureprojects,isreduced,affectingcontractualnegotiationsbetween

design/buildcontractorsandowners.This,

coupledwithincreaseddemandforlimitationsofliabilityfromdesignprofessionals,isdrivingupthecostofcontractor-purchasedprojectplacements,andleadingownerstoconsiderprocuringowner’sprotectiveprofessionalindemnity.

Themarketforowner’sprotectiveprofessionalindemnityremainsstrong,withsubstantial

capacityandarobustappetiteformostprojects.

NewYorkControlledInsurancePrograms(CIPs)

Thepricingandstructuralsetupofcontrolled

insuranceprogramsinNewYorkoftenmake

themviableprimarilyforexceptionallylarge

projectsorforthoseincorporatedintoongoing,rollingprograms.

Additionally,therehasbeenanoticeabledecrease

intheconstructionofhigh-riseresidentialbuildingswithinNewYorkCity.

Primarymarketoptions

?PrimaryGeneralLiability(GL)coveragelimitsof$5millionperoccurrence,$10millionin

aggregateperproject,and$10millioninaggregateperpolicyperiodaretypicallynecessarytosecureexcesscoverage.

?InNewYork,theminimumretentionlevelsforgeneralliabilityrangefrom$3millionto

$5million,varyingaccordingtotheproject'ssizeandcomplexity.

?ThemarketforGL-onlypoliciesissomewhatrestricted.

?Increasingly,insurancepurchasersareopting

forcombinedcoveragethatincludesboththe

ownerandthegeneralcontractoronaproject-specificbasis.Thissegmentofthemarketis

competitive,andinsurersgenerallymandate

theengagementofthird-partyriskmanagementreviewservicesforeligibility.

Excessmarketoverview

?Insurersintheexcessmarkettypicallystipulateaminimumattachmentpointof$5million.

?Thereisalimitednumberofinsurerspreparedtoassumetheleadpositioninexcesscoverage.

?Thelimitsofferedthroughtheexcesscoveragelayersaregenerallybeingreducedbyinsurers.

NYLaborLaw240(1)

NYLaborLaw240(1)maintainsitsreputationfor

makingNewYorkalessattractivestateforinsurers,withonlyafewnewinsurersenteringthemarket

andtheaveragesettlementvalueofclaimsunderthislawremainingsignificant.

Simultaneously,theadoptionofalternative

disputeresolutionisontherise,increasinglybeingimplementedinnumerouslarge-scaleprojects

bothinNewYorkCityandupstateNewYork.

Marketoutlook

Interestratesandinsurancepremiumsarecloselylinked,affectingtheprofitabilityoftheinsurance

industrybasedonspecificcircumstancesandthebroadereconomiccontext.Insurancecompanies

typicallyinvestthepremiumstheycollectinto

fixed-incomesecuritiessuchasbondsandtreasurynotes,whicharesubjecttoregulatedinvestment

guidelines.Theseinvestmentsgenerateadditionalincomethatcanbeusedtopayclaimsandcoverotherexpenses.

Wheninterestratesdecrease,thevalueof

existingbondsgenerallyincreases.However,

ifaninsurancecompanyneedstoliquidateits

bondsprematurely,theyieldmightbelowerduetotheinverserelationshipbetweenbondprices

andinterestrates.Ontheotherhand,when

interestratesincrease,insurersfacereinves