Find out how the softening insurance market presents both challenges and possibilities for wholesale and retail brokers and their business clients, with a particular focus on commercial property and construction.

As we move ahead into 2025, a noticeable softening is occurring within the global insurance market. For retail and wholesale brokers, and their commercial clients, especially in the areas of property and construction insurance, this creates both challenges and opportunities. In this article, we explore what market softening means, why it matters, and how you can position your business to benefit from these changes. Partnering with an expert like Costero Brokers, with our deep expertise and established relationships in the London and European insurance and reinsurance markets, can provide the edge you need to thrive in this evolving landscape.

Why is the insurance market softening?

The insurance market is cyclical, and it is in the phase where we are seeing it ‘soften’. This is being triggered because the capital base is increasing for individual insurance companies due to the profitability of the last year, additionally the Insurance Treaty market at 1/1 have offered lower attachments and lower costs of reinsurance.

In addition to this over the last few years, lower claims and improved risk management has led to insurance companies lowering their premium rates and expanding coverage options with increased competition among insurance providers. It means buyers usually find it easier to get better deals and more favourable terms.

Today’s softening market: an overview

According to a wide range of industry observers, the global insurance market began to soften in late 2024, and this has continued in early 2025. This shift follows several years of hard market conditions characterised by rising premiums, stricter underwriting, and capacity constraints.

In recent months, key market indicators such as property catastrophe reinsurance indices and renewal rates began to show clear declines. (Source: Insurance Business).

The insurance industry’s annual renewals for January 1st, 2025 provided fresh evidence, with the latest data highlighting a notable decline in property catastrophe reinsurance rates – the first since the bottom of the previous soft market in 2017. (Source: Artemis)

Analysts estimate that at the 1/1 renewals, loss-free risk-adjusted rates across a diversified reinsurance portfolio fell by around 6%. They highlight that rate adequacy remains “very attractive” in property classes. (Source: Reinsurance News)

One of the contributing factors that has driven this is the Catastrophe storms of 2024, Hurricane Milton, Hurricane Helene and Hurricane Berryl did not cause the losses expected from the market and compared to the recent years (Source: Insurance Business). Further to this there has been a steady increase in the rates over the last few years in the market due the hard market (Source: Leader’s Edge)

Similarly, recent analysis of the market points to a “new phase of favourable conditions”, suggesting more competitive pricing for insurers in the coming year (source: Insurance Business).

The possible opportunities of a softer market

• Lower premiums: Falling rates mean you can potentially secure more competitive premiums for your clients. This is particularly beneficial for large-scale commercial property or construction projects where insurance costs can represent a significant portion of budgets.

• Increased market capacity: With insurers and reinsurers willing to take on more risks this advantageous for clients with complex or high-value portfolios that previously faced difficulties in obtaining coverage and limits. We have seen insurers widen their appetite, ie: habitational portfolios, risks in more catastrophe exposed areas and heavier industries such as steel and iron works, are all within target sectors.

• Negotiation power: As the market becomes more competitive, you gain leverage to negotiate broader policy terms and more comprehensive coverage on behalf of your clients. Gaining more flexibility to find tailored solutions for your clients.

Benefits of Partnership during a Softening Market:

• Client loyalty: It’s vital to ensure the financial stability of carriers you work with, benefit from the price reductions on a long term scale. London wants to partner with their clients for the future and to retain the business, and they will prioritise their long-term clients with the most beneficial pricing.

• Long Term Certainty and Continuity: by partnering with Costero Brokers, we can provide stability and continuity in pricing. This allows budgeting for insurance for your clients year on year allowing businesses to plan for the future. Partnering with Costero and the London Market mitigates the extreme peaks and troughs that we have seen some clients suffer from in the last few years.

• Long Term Quality: Partner with a Costero who look for the long-term projection and look at the wider priorities and needs of your clients. Always offering comprehensive coverage no matter what the cycle, focusing on quality as well as price for the client.

Finding your expert partner for an evolving insurance market

In a market experiencing significant change, having the right partner is critical. Costero Brokers brings unmatched expertise in all key insurance areas, including commercial property and construction, supported by robust relationships with the London and European reinsurance markets. Here’s how we can help you take advantage of the softening market.

Costero is not restricted to using specific markets, unlike larger brokers who have contingent commission arrangements with key insurers to restrict marketing.

Key Benefits:

1. Expertise in complex risks

We offer a wide range of insurance solutions to meet the complex needs of retail and wholesaler brokers. For instance, our Property team specialises in securing solutions for commercial property such as office buildings, retail spaces, or industrial facilities, our team can navigate the softening market to deliver competitive and comprehensive coverage tailored to their unique needs. Our team has over 40 years experience, and experience of seeing the market change and experience of how to navigate client needs within the a softening market for the long term.

Similarly, our Construction insurance division has deep experience in managing the intricate risks associated with large-scale projects, from infrastructure developments to residential builds. We offer bespoke Builder’s Risk Insurance solutions, and see growing demand in areas such as Frame and Renovation projects. By leveraging the softening market, we help you secure broad coverage that ensures your clients are protected from start to finish.

By capitalising on the softening market and utilisation of long-term partnerships and showing loyalty to the insurance panel.

2. Strong market relationships

Our long-standing relationships with leading insurers and reinsurers – at Lloyd’s of  London, London, European and worldwide markets – give us access to a wider range of options. This allows us to secure competitive pricing and favourable terms that might not be available through other channels.

3. Navigating market complexities

While the softening market offers opportunities, it also presents complexities. Our team is skilled at navigating these challenges, ensuring you and your clients receive the right balance of affordability, security and reliability.

4. Tailored support for brokers and MGAs

We understand the unique pressures faced by retail brokers and MGAs. That’s why we work as an extension of your team, providing personalised support to help you meet your clients’ needs while strengthening your own business relationships. Whether you need assistance with underwriting, claims, or market insights, we’re here to help.

Move ahead to get more from the softening market

In summary, the softening insurance market of 2025 offers exciting opportunities for retail brokers, and their commercial clients, particularly in property and construction. But taking full advantage requires expert guidance, strong connections and market insight. That’s where Costero can make all the difference.

We need to understand your requirements to best capitalise on the softening market, what are your priorities;

1. Lower price
2. Better coverage

Clients must think long term and to the future of when the market changes again and what will your compromises be to get the better pricing in the future when we see the market harden in the future.

To learn more about opportunities in the softening insurance market and discuss your goals, get in touch with our expert, Cordelia Powell at Costero Brokers.

Please be advised: This is not a guarantee that the market will continue to soften.

Find out how to approach insurers that are looking for innovative & new insurance products, from our roundtable discussion with leading London market underwriters.

Bringing an innovative insurance product to market involves overcoming a wide range of challenges – not all of them obvious, particularly to tech-focused startups. Perhaps the biggest challenge is finding the capacity to make your idea work in the real world. That’s why connecting from an early stage with brokers and underwriters that specialise in innovation is vital for ambitious new insurance startups, MGAs and InsurTechs.

To discuss these challenges and share practical insights, Costero Brokers recently hosted a roundtable discussion with two of the London market’s leading innovation underwriters.. Our insurance innovation Q&A  participants are:

• Hayley Budd, Class Leader, Innovation, at Apollo Group
• Rob Jarvis, Head of Innovation at Tokio Marine Kiln (TMK)
• Host: James Gadbury, Divisional Director at Costero Brokers

Key highlights of the discussion:

James Gadbury: Thanks to both of you for your time today. To start, can you please tell us a little about your roles?

Hayley Budd: I lead the innovation class at Apollo. We underwrite capacity for new and innovative products that solve real customer problems. Some products we build ourselves, while others involve partnering with startups or MGAs.

Rob Jarvis: At TMK, I run the innovation underwriting team, focusing on novel and unconventional risks. Our job is to trial and grow these ideas until they’re ready for commercial scale.

JG: That’s great. Looking over your recent career, what would you say is your biggest achievement to date, or a piece of business you’re most proud of?

HB: Launching the Apollo Innovation ICX Consortium in 2023 was a big moment. Many doubted it could be done, but we created a fully delegated consortium that supports innovative insurance products. It’s still the only consortium of its kind, to my knowledge.

RJ: At TMK, we centralise new ideas in one place to de-risk them for other underwriting teams. It’s satisfying to see people now coming to us with ideas they’re not quite ready to take on themselves. I’m also proud of enabling socially impactful products – one recent example is Sola’s Wind & Hail Insurance, which provides rapid payouts and genuinely helps people.

JG: What are you looking for in the startups, MGAs, or InsurTechs that you partner with? And what common traits have you seen in the ones that are most successful?

HB: First, we’re looking for products that close real protection gaps. Tech is also vital, especially for parametric or usage-based insurance. Startups need scalable technology and a solid understanding of the regulatory environment. It’s important to respect the rules we work within.

RJ: I’d add that focus is key. Successful founders often pick one idea and execute it well rather than spreading themselves too thin. Startups should also bring us something we lack—be it technology, distribution, or data.

JG: Where do you see the big opportunities for innovation in insurance? Are there specific areas or markets you’d like to see new offerings in?

HB: We’re interested in innovative structures like parametric insurance with novel triggers such as non-damage business interruption, and embedded insurance solutions. Emerging technologies like AI and products supporting the carbon transition or addressing supply chain disruptions are also key areas.

RJ: Optimising existing products with technology is a significant opportunity and pays the bills today. However, entirely new solutions create fresh market opportunities for the future. Areas like battery technology, autonomous vehicles, and carbon initiatives are particularly exciting.

JG: Do you prefer MGAs improving existing markets or startups creating entirely new products?

RJ: Both have value. Enhanced products can scale quickly and generate immediate income, while new products take longer but create fresh markets. It’s important to balance the two.

HB: I agree. Both approaches have their merits, but new ideas addressing gaps, such as in emerging tech or environmental needs, are crucial.

JG: What makes the London market a good place for new MGAs or startups looking for capacity?

RJ: The sheer scale and concentration of insurance talent and capital in the London market are unmatched. With more than 60,000 insurance industry people, 350 major insurance and reinsurance companies, and 200 broker firms in such a small area, the resources here are incredible.

HB: Lloyd’s of London is built for hard-to-place business. Programs like the Lloyd’s Lab accelerator and the ICX Innovation Class allowance offer startups unique opportunities to test ideas and access mentorship. The collaborative culture also fosters innovation.

JG: What are the common mistakes startups make, and what should they try to avoid?

HB: Many startups try to move into insurance without addressing a real problem. Others underestimate the regulatory environment or overestimate how much of the premium is available for technology.

RJ: Startups often misjudge the economics of insurance and the thin margins involved. Taking venture capital (VC) can also lead to unrealistic growth expectations, misaligned with what insurers prioritise.

JG: In your view, how can an expert broker like Costero assist insurance startups, MGAs and InsurTechs in securing capacity and bringing innovative products to market?

HB: The right broker can unlock distribution opportunities, ensure operational basics are in place, and help startups navigate regulatory complexities. They play a vital role in getting the foundation right.

RJ: A good broker provides valuable commercial validation. If a product reaches us via a broker, it’s likely been vetted for market demand. They’re also helpful mediators between risk-averse underwriters and ambitious startups.

JG: Thanks so much to both of you for your time and insights. This has been an incredibly valuable discussion.

If you’d like to discuss your idea for a new insurance product with us, or learn more about what capacity is available, , please get in touch with our expert James Gadbury at Costero Brokers.

Learn how to address emerging cyber threats of property damage to industry and critical infrastructure with an expert cyber insurance partner.

In today’s hyper-connected world, the boundary between digital and physical realms has never been thinner. The convergence of cyber and physical systems has created new vulnerabilities for businesses across various sectors.

Cyber-physical incidents, where cyberattacks lead to tangible property damage, are becoming more prevalent . These emerging risks pose significant challenges to businesses and insurance brokers worldwide who need to navigate this increasingly complex landscape.

This article explores the concept of “cyber-physical” risks, particularly focusing on how cyber attacks can lead to property damage in sectors such as energy, construction and manufacturing. We’ll also discuss how partnering with a cyber insurance expert like Costero Brokers can help you navigate these complex risks with tailor-made insurance solutions.

The growing threat of cyber-physical risks

Cyber-physical incidents exploit vulnerabilities in the integration of digital and physical systems. They can cause significant physical damage and operational disruptions.

These risks are particularly relevant for businesses in sectors such as energy, construction and manufacturing – which increasingly rely on interconnected systems, autonomous machinery, robotics, drones, and other operational technology (OT). Here, cyber-physical incidents can have devastating consequences for businesses and the wider public environment.

In the energy sector, cyber incidents can lead to widespread power outages, significant economic losses, damage to physical infrastructure, and even catastrophic events like explosions. The interconnected nature of energy systems makes them particularly vulnerable to cyberattacks, which can compromise the safety of workers and the public.

In the construction and manufacturing sectors, the use of autonomous machinery and robots is on the rise. Today’s connected smart industrial machines are far more advanced, intelligent and mobile than the ‘robot arms’ introduced on production lines in the 1970s. These technologies offer numerous benefits, such as increasing productivity and reducing workplace accidents.

However, as these technologies become integral to industries, their cybersecurity weaknesses are a growing concern. they have expanded the attack surface for cybercriminals, and increased exposure to cyber-led physical damage. Rapid technology adoption without adequate cybersecurity measures is exposing these industries to significant risks.

For example, hacked inspection robots or compromised 3D printing systems could lead to operational disruptions, production delays, financial loss, property damage and even physical injury.

The rapid digitalisation of these industries has outpaced security improvements, making them prime targets for cybercriminals. The cyber-physical risks are amplified by factors such as:

• The growing use of Internet of Things (IoT) devices, often with weak security measures.

• Legacy systems that are poorly integrated with modern cybersecurity protocols.

• Increasing criminal sophistication, geopolitical tensions and cyber-warfare attacks that target critical infrastructure.

The financial and reputational costs of these incidents can be immense, impacting not only the affected businesses but also their customers, supply chains, regulators and insurers. As technology evolves, so do the tactics of cybercriminals, making it imperative for businesses to understand these threats and implement robust risk management strategies.

Cyber-physical incidents in the headlines

Several high-profile incidents worldwide in recent years have highlighted the potential for cyber attacks to cause physical damage:

• The Stuxnet incident, revealed in 2010, marked the first known use of a cyber weapon to cause physical destruction, highlighting the potential for cyber-physical attacks. It was a sophisticated cyber-physical attack that targeted Iran’s nuclear enrichment facilities. Developed by U.S. and Israeli intelligence, Stuxnet was a computer worm designed to sabotage industrial control systems (ICS) used in Iran’s nuclear program. The worm caused centrifuges to spin out of control, leading to significant physical damage. (Source: CSO)

• In 2014, hackers caused massive damage to a German steel mill by remotely manipulating control systems, resulting in a significant explosion and massive damage to the plant. (Source: BBC News)

• The Colonial Pipeline attack in 2021 was a significant cyber-physical incident that disrupted fuel supply across the eastern United States. The attack, carried out by the hacker group DarkSide, forced Colonial Pipeline to shut down its operations, leading to fuel shortages and price spikes. (Source: US Cybersecurity and Infrastructure Security Agency)

• Recent cyber-physical attacks allegedly backed by Russia have targeted overseas energy plants and power grids. In 2022, the Sandworm hacker group executed disruptive cyber-physical attacks on Ukrainian power plants, leveraging novel techniques to impact industrial control systems (ICS) and operational technology (OT). The attacks involved tripping substation circuit breakers, causing power outages affecting two million people. (Source: Google Cloud Blog)

These incidents highlight the vulnerability of industries and critical infrastructure to cyber-physical attacks, and the growing capability of cyber actors in executing such sophisticated attacks globally. They underscore the critical need for businesses in these industries to have robust cybersecurity measures and appropriate cyber insurance solutions.

Finding the right cyber-physical insurance coverage

To mitigate the financial fallout from cyber-physical incidents, businesses must consider comprehensive cyber insurance solutions. Traditional insurance policies often exclude damages stemming from cyber-physical events, leaving significant gaps in coverage. However, the insurance market is evolving to address these challenges, offering products to meet changing needs.

An expert in cyber-physical insurance can help companies and insurance brokers bridge the gap, with tailored solutions designed to address the unique challenges of cyber-physical risks, such as:

• Standalone cyber property damage policies: These provide dedicated coverage for physical damage caused by cyber incidents.

• Integrated coverage options: policies blending property and cyber coverage to mitigate exclusions found in standard offerings.

• Customised endorsements: Affirmative property damage endorsements that ensure clarity and protection against specific cyber-physical risks.

• Business interruption coverage: This protects against income loss due to downtime caused by cyber incidents, ensuring that businesses can recover financially after an attack.

As well as protection for property damage, such solutions can include coverage for:

• Loss of income and extra expenses during downtime.

• Costs associated with regulatory compliance and crisis management.

• Liability arising from third-party claims due to system breaches.

For an in-depth exploration of cyber-physical risks and their insurance implications, download this Lloyd’s of London report: ‘Shifting powers:  physical cyber risk in  a changing geopolitical landscape’.

How Costero Brokers can help with your cyber-physical risk challenges

Working with a cyber insurance expert like Costero Brokers can significantly enhance your ability to manage cyber-physical risks. Our Cyber, Media, and Technology (CMT) division specialises in creating tailor-made cyber insurance solutions designed around your specific needs. Our team of experts understands the unique challenges faced by businesses in sectors such as energy, construction and manufacturing, and can help you navigate the complexities of cyber-physical risks. By working with Costero, you can find the right protection against the evolving cyber threat landscape.

We understand that no two businesses are alike. That’s why our approach is never “off-the-shelf.” Our team collaborates closely with you to assess your risks and develop a bespoke insurance strategy that aligns with your operational needs and regulatory requirements. Here’s how we ensure companies are protected:

• Expert negotiation: Leveraging our deep connections in the Lloyd’s of London market and beyond, we negotiate comprehensive and competitively priced policies tailored to each client’s needs.

• Holistic risk assessment: Our team works with you to identify vulnerabilities and craft insurance programmes that address both current and emerging risks.

• Dedicated support: From the initial consultation to policy placement and claims management, we provide end-to-end service to ensure seamless support.

Whether you are a wholesale insurance broker seeking bespoke solutions for your clients or a business leader looking to secure your operations, partnering with Costero can give you the competitive edge.

Take the next step to cyber-physical coverage

Don’t leave your business or clients exposed to the growing risks of cyber-physical incidents. Talk to Costero today to secure a tailor-made cyber insurance programme that aligns with each client’s unique needs and risk appetite.

To learn more about our commercial cyber insurance solutions and discuss your goals, please get in touch with our expert Jonathan Olley at Costero Brokers.

Costero Brokers Ltd., a privately held London-based brokerage, is thrilled to announce the launch of its newly redesigned website. This significant update reflects Costero Brokers’ commitment to providing exceptional service and accessibility to its clients across the globe.

As a committed independent insurance brokerage, Costero Brokers continues to focus on providing personalized insurance solutions that cater to the unique needs of your clients across various industries. The revamped website highlights this dedication by making it easier for visitors to find the exact insurance coverage they need in today’s dynamic and rapidly evolving market.

The website’s intuitive layout and streamlined navigation make it easier for clients to find the information they need quickly and efficiently. Clients can access a wealth of resources, including detailed service offerings, industry insights, and the latest news in the insurance sector. A secure client portal provides personalized access to policy information, claims processing, and account management, enhancing transparency and convenience. The site features interactive tools designed to assist clients in understanding their insurance options and making informed choices.

“We are excited to unveil our new website, which represents our dedication to innovation and client satisfaction,” said John Tallarida, CEO of Costero Brokers. “Our goal is to provide an online platform that not only meets but exceeds our clients’ expectations, offering them the tools and information they need to navigate the complex world of insurance with confidence.”

To see the site’s refreshed and streamlined look and connect with a member of the Heffernan team, visit the new website at costerobrokers.com.

About Costero Brokers Ltd.

Costero Brokers Ltd., formed in 2017, is an independent, dynamic, and entrepreneurial insurance and reinsurance Lloyd’s of London wholesale broker specializing in finding capacity for hard-to-place or emerging risks. Costero focuses on open market facultative, binding authority, reinsurance, and alternative risk transfer business placed into Lloyd’s of London, European, and international company markets. Whether clients are brokers, coverholders (MGAs), captives, or insurers, the team draws upon steadfast relationships with underwriters and is passionate about delivering tailor-made solutions to their insurance and reinsurance needs. Costero Brokers is an approved Lloyd’s coverholder, which it uses strategically to support clients’ business.

For more information, visit costerobrokers.com.

Find out how an LPT can help an insurer clean up their balance sheet, achieve capital relief, and remove historical liabilities.

For insurance carriers and underwriters, managing capital efficiently while mitigating risk is more critical than ever. One effective strategy to achieve this is through a loss portfolio transfer (LPT), a solution that enables carriers to remove liabilities from their balance sheets, freeing up capital and resources. In this article, we’ll explore the related challenges you face as an insurance carrier or underwriter, why an LPT is such a valuable tool, and how Costero Brokers, with our deep expertise and connections within the reinsurance market, can guide you through a successful LPT.

Financial challenges facing insurance companies today

As an insurance carrier or underwriter, you are no stranger to the pressures of balancing profitability with regulatory requirements and capital management. Your key challenges in this will include:

• Cleaning up the balance sheet: One of your main concerns is likely to be cleaning up your balance sheet, particularly when legacy liabilities linger. Old claims or underperforming portfolios not only tie up capital but also cloud the true financial health of your company. This challenge is particularly acute when you need to present a clear, robust financial position, such as ahead of a merger, acquisition, or restructuring.
• Capital relief: In addition, capital relief is a crucial driver in your operations. With Solvency II and other regulatory frameworks demanding ever-increasing capital reserves, freeing up locked capital is essential to maintain competitiveness and invest in new opportunities. However, without the right strategies, this process can be slow and fraught with complications.
• Removing historical liabilities: Many insurance portfolios contain “long-tail” liabilities, where claims take years, or even decades, to fully settle. These historical liabilities not only present an unpredictable future financial burden but can also consume resources that could be better utilised elsewhere. Removing such liabilities can significantly reduce your risk exposure and provide peace of mind.

What Is a loss portfolio transfer (LPT)?

A loss portfolio transfer (LPT) is a financial transaction that allows you, as an insurance carrier, to transfer the liabilities of a specific portfolio to a reinsurer. This includes all future claims arising from the portfolio’s historical policies. In return, you pay a premium to the reinsurer, who then assumes the responsibility for managing and settling the claims.

Simply put, a loss portfolio transfer acts as a “reset button,” enabling you to offload your exposure to legacy liabilities, free up capital, and focus on more profitable aspects of your business.

Why should insurers consider a loss portfolio transfer?

As an insurer, if you’re looking at strategies to optimise your financial position, an LPT with a specialist reinsurer can provide several distinct benefits. Here’s why you should consider an LPT:

• Capital optimisation: By transferring liabilities to a reinsurer, you can immediately release capital that was previously locked up to cover those future liabilities. This can offer significant relief under regulatory frameworks like Solvency II, helping you meet capital requirements without having to raise additional funds.
• Removing volatility and risk: Old portfolios, particularly those with long-tail exposures, can introduce significant volatility to your financials. A sudden surge in claims can disrupt even the most carefully planned financial strategies. By transferring this risk to a reinsurer, you can mitigate the impact of unexpected claims and better stabilise your company’s future.
• Reduced administrative burden: Handling legacy claims can be resource-intensive, draining both your operational efficiency and financial performance. A successful LPT not only offloads the financial risk but also shifts the administrative burden of managing these claims to the reinsurer, freeing up your team to focus on more productive activities.
• Enhanced financial position for strategic moves: If your company is preparing for a sale, merger, or acquisition, cleaning up the balance sheet through an LPT can make you more attractive to potential buyers, partners or investors. It simplifies your financial picture and removes the uncertainty of legacy liabilities, which could otherwise hinder a successful deal.

How Costero can support you with your LPT

Working with an expert like Costero Brokers can make all the difference in executing a successful LPT. Here are some of the reasons why we’re your natural partner in this area:

• Expertise in loss portfolio transfers: Costero Brokers’ extensive experience with LPTs ensures that we can help you navigate the complexities of these transactions. We understand the intricacies involved, from negotiating with reinsurers to structuring deals that align with your specific financial goals.
• Strong relationships with reinsurers: We have close, established relationships with specialist reinsurers, including those at Lloyd’s of London and other key markets. These connections allow us to access the most competitive terms for your LPT, ensuring you achieve a solution that meets your objectives in terms of both cost and risk transfer.
• Tailored solutions: Every insurance carrier’s needs are different, which is why we take a bespoke approach to each LPT. We work closely with you to assess your portfolio, evaluate the risks, and present a range of potential solutions. Our goal is to help you find the right LPT structure that delivers both capital relief and operational simplicity.

How to start thinking and discussion about your LPT

If an LPT sounds like it could be beneficial, here are a couple of practical steps you can start with:

1. Identify potential portfolios for transfer: Begin by reviewing your current portfolios and identifying blocks of business that could benefit from an LPT. These are typically older portfolios with long-tail claims or those with a history of volatility.
2. Consider your company’s financial objectives: If your company is preparing for a sale, merger, or significant restructuring, an LPT could be a strategic solution. Your leadership team may not be aware of the advantages an LPT could offer, so starting a conversation around this can add real value.

Let’s talk about how an LPT can help you

Your company’s legacy liabilities don’t have to define your future, so let us help you clear the path forward. At Costero Brokers, we’re ready to support you towards a successful loss portfolio transfer. Whether you’re looking to clean up your balance sheet, optimise capital, or remove long-standing liabilities, we have the expertise and market access to deliver the right solution for you.

To learn more about LPTs and our services for global facultative and treaty insurance, and discuss your goals, please get in touch with our experts Mark Jesson and David Pratt at Costero Brokers.

Find out why businesses need DBI coverage to insure against cyber threats associated with suppliers and partners.

In today’s digital age, businesses across all industries are more reliant than ever on technology, creating a growing vulnerability to cyber risks within their supply chains. Cyber supply-chain risks pose a serious threat to companies, as even minor disruptions from third-party providers can lead to significant financial losses.

This article explores the importance of dependent business interruption (DBI) insurance coverage as a critical solution for managing cyber risks within the supply chain. We’ll discuss recent high-profile cyber incidents, challenges that businesses face, and how working with a cyber insurance expert like Costero can help brokers and their commercial clients stay ahead of these risks.

Cyber supply chain challenges facing your commercial clients

Regardless of how secure a business’s internal systems are, no organisation is entirely immune to cyber supply-chain risk. Many businesses, especially those operating complex supply chains, rely heavily on third-party software and technology providers for their day-to-day operations. The failure of these external providers can result in widespread interruptions, even if a company’s internal networks are secure.

For example, businesses may depend on cloud services, IT management platforms, or digital payment systems to operate efficiently. When these third-party services suffer from system failures, software glitches, or cyberattacks, the businesses that rely on them can experience significant operational disruptions. These interruptions could affect thousands or even millions of users or customers, depending on the scale of the provider. This is known as a systemic risk, where a single point of failure in a major provider’s network can have a cascading effect, bringing entire industries to a standstill.

In the headlines: cyber incidents and their financial impacts

Recent events have highlighted just how costly these supplier-related cyber incidents can be – such as:

• CDK Global: In June 2024, a ransomware attack against software provider CDK Global caused widespread disruption across North American auto dealerships. For example, the attack forced the giant Sonic Automotive group to announce losses amounting to $30 million in income due to the prolonged system outage. This case demonstrates the far-reaching financial consequences that businesses can face when third-party technology providers are impacted by a cyber event. (Source: Data Breach Today)

• CrowdStrike: In July 2024, leading cybersecurity provider CrowdStrike distributed a faulty software update to its commercial clients that crashed around 8.5 million Microsoft Windows systems globally. This led to significant disruptions across various industries. For example, the disruption caused by the outage cost Delta Air Lines a reported $500m, including lost revenue and compensation to passengers. Although the incident was not a result of a malicious cyberattack, it nonetheless illustrates how businesses are increasingly dependent on third-party technology partners, underscoring the need for businesses to have contingency plans in place, even when their own systems remain uncompromised. Source: BBC News)

Providing cyber insurance solutions for managing supply chain risks

Given the unpredictability of cyber incidents, it’s challenging for businesses to evaluate their exposure to supply-chain risks. However, having the right cyber insurance coverage, particularly “dependent business interruption” (DBI) coverage, is a vital way to mitigate this exposure. DBI provides insurance protection for companies when a third-party service provider suffers an outage or cyberattack, which in turn disrupts the insured business’s operations.

A critical feature of any robust cyber insurance policy is the “system failure trigger” for DBI. This ensures that the policy covers businesses for disruptions caused by system failures such as those seen in the CrowdStrike incident, which are not necessarily the result of a cyberattack but can have equally damaging impacts.

Some cyber policies on the market only include standard (not dependent) business interruption cover, which protects businesses against direct financial losses resulting from their own network being compromised by a cyber event. This type of coverage is essential for reimbursing the loss of income during network downtime and covering the costs of responding to the incident. However, it is important to note that business interruption cover is generally limited to the insured business’s own network. As a result, it does not typically cover losses arising from a failure of a third-party’s network – highlighting the importance of having DBI coverage as part of a broader risk management strategy.

How Costero can help you meet your clients’ cyber risk challenges

As a broker, your commercial clients depend on you to provide comprehensive insurance solutions that address their specific needs, and nowhere is this more apparent than in the evolving world of cyber risk. At Costero, we specialise in tailoring cyber insurance programmes to meet the unique risk profiles of your clients. Rather than providing generic, off-the-shelf policies, we take the time to understand each of your client’s operations, their reliance on third-party technology providers, and their broader risk appetites.

Working with Costero means gaining access to Lloyd’s of London and other specialist re/insurance markets. We deliver competitively priced, bespoke programmes that offer your clients comprehensive coverage. We ensure that the policies we negotiate on behalf of your clients include key elements like dependent business interruption, system failure triggers, and other critical protections that can safeguard businesses against systemic risks within their supply chain. Our experts continually review the evolving cyber threat landscape to ensure that your clients’ policies will remain up-to-date and fit-for-purpose.

Take the next step to better cyber coverage for your clients

With the increasing complexity of today’s digital supply chains, ensuring your clients are protected from the financial impacts of cyber disruptions is more important than ever. At Costero, we understand the intricacies of cyber insurance and are committed to helping you secure the right protection for your clients. Don’t settle for a one-size-fits-all policy – talk to us today about a cyber insurance programme that’s customised to each client’s specific needs and risk profile.

To learn more about our commercial cyber insurance solutions and discuss your goals, please get in touch with our expert Jonathan Olley at Costero Brokers.

Find out how to manage “hard to place” risk with innovative insurance and reinsurance solutions at Lloyd’s and beyond.

In the ever-evolving landscape of the insurance and reinsurance marketplace, it’s vital that you stay ahead of changing demands. As an insurance broker, carrier or underwriter – or as a large business with complex risks – this landscape presents both challenges and opportunities.

In this article, we’ll explore innovative ways to navigate these complexities and handle “hard to place” risks, particularly through alternative risk transfer (ART) – and explain how Costero Brokers can help you create your ideal risk solution.

Facing the challenges of large and complex risks

In today’s re/insurance marketplace, you face a range of common challenges that can impact your ability to secure appropriate coverage:

1. Rapidly changing carrier risk appetite: Insurance carriers frequently adjust their risk appetites in response to market conditions, regulatory changes, and emerging risks. As a broker or underwriter, this volatility can make it difficult to find suitable coverage for your clients.
2. Long-term pricing: Predicting long-term pricing trends is inherently challenging due to the unpredictable nature of risks and market dynamics. This uncertainty can make it difficult for you to secure stable and affordable coverage over extended periods.
3. Available capacity: The availability of capacity in the market can fluctuate, influenced by factors such as catastrophic events, economic conditions, and regulatory changes. Limited capacity can restrict your options for placing large or complex risks.

Addressing “hard to place” risks

“Hard to place” risks are those that are difficult to insure through traditional channels due to their complexity, high severity, or unique nature.

Discover the potential of alternative risk solutions

Alternative risk transfer (ART) offers you a strategic approach to addressing these challenges. This encompasses a range of techniques and structures designed to transfer risk outside of traditional insurance mechanisms. These solutions can give you greater flexibility, stability, and cost-effectiveness for managing complex and hard-to-place risks.

Among your potential options for alternative risk transfer are:

• Captives: As a large business, establishing your own self-owned “captive” insurance company allows you to retain and manage your own risks, providing greater control and potential cost savings.
• Risk pools: Pooling your risks with other entities can spread the risk and reduce the impact of large losses.
• Parametric insurance: This innovative approach triggers payouts based on predefined parameters, such as weather conditions or seismic activity, rather than actual losses.

Find expertise in creating alternative risk structures

At Costero Brokers, our expert team brings a wealth of experience in creating alternative risk structures. We work closely with you to understand your unique risk profile and develop customised solutions that align with your strategic objectives. Our approach involves:

1. Risk assessment: Conducting a thorough analysis of your risk exposures and identifying areas where traditional insurance may fall short.
2. Solution design: Developing bespoke alternative risk solutions that address your identified risks, leveraging our expertise in captives, risk pools and parametric insurance.
3. Market access: Utilising our strong relationships with Lloyd’s, other leading markets, and international partners to secure the best possible terms and capacity for your needs.
4. Ongoing support: Providing continuous support and monitoring to ensure the effectiveness of your alternative risk solution and making adjustments as needed.

Choose your best option for alternative risk solutions

You need innovative and flexible solutions to navigate the challenges of rapidly changing risk appetites, long-term pricing uncertainties, and fluctuating capacity. Costero Brokers is perfectly positioned to help insurance brokers, carriers, underwriters and large businesses leverage alternative risk transfer mechanisms to manage complex and hard-to-place risks effectively.

Our deep expertise in the Lloyd’s market and our commitment to creating tailored risk structures make us a trusted partner in this evolving landscape. Explore the benefits of alternative risk solutions with Costero and discover how we can help you achieve your risk management goals.

To learn more about our solutions for alternative risk transfer and “hard to place” risks, and to discuss your goals, please get in touch with our experts David Pratt or Mark Jesson at Costero Brokers.