On October 24, 2019, the Risk Management and Insurance Society (RMIS) had the opportunity to hear from Bill Hazelton, an Executive Vice President at Chubb. Hazelton spoke about the state of the casualty insurance marketplace and the unique phenomenon that is currently occurring in the industry: a hardening market due to insurers’ hesitations to put out capital. This is occurring because the losses from increased litigation (particularly with Securities Class Action lawsuits) have skyrocketed over the last few years. Additionally, the rates insurers were charging over these same years were extremely low in comparison. This combined effect is resulting in increased premiums, stricter underwriting policies, increased deductibles, and reduced limits. Ultimately, these efforts limit the supply of insurance and result in less coverage for a higher price.
All in all, the hardening of the casualty insurance market is a very interesting topic to discuss, and we enjoyed having Hazelton as a speaker. RMIS found this event to be very applicable since hard and soft insurance markets are a topic that we discuss in one of the RMI classes. Hazelton also spoke at length about the importance of understanding insurance contracts to be a successful underwriter, which is the focus of another RMI class offered at UW-Madison.