Explore how technologies like blockchain, cryptocurrency, DeFi, smart contracts, NFTs, AI and Web3 are transforming the business landscape – and how the right cyber insurance can keep organisations trading when things go wrong.

Across every business sector, the way organisations run is shifting onto new kinds of digital infrastructure. Payments that settle on blockchains, customer memberships issued as digital tokens, AI copilots helping teams code, market and serve – and data moving everywhere on cloud platforms. In short, each organisation increasingly relies on digital infrastructure it does not own or fully control. That creates real opportunities — and new points of failure. Here’s how the landscape is evolving, where risks are emerging, and how working with a specialist like Costero Brokers can help you build a tailor-made cyber insurance programme that fits how organisations operate today.

The business landscape is changing fast

Consider the next generation of digital business infrastructure. Customers tap their phone or wristwatch to pay. Business teams collaborate in the cloud. Marketing leans on AI to personalise campaigns. Finance teams explore tokenised assets or crypto rails for faster settlement. This isn’t tomorrow’s world; it’s happening now.

This new infrastructure can create real commercial advantage:

• Speed and automation with smart contracts: Blockchain-based “smart contracts” can automate routine business steps (say, paying a supplier once goods are confirmed), helping cash flow and reducing manual error. For many businesses, this means faster settlement and fewer reconciliations. (Source: IBM)
• Building trust with tokenisation: Tokenised assets and Web3-style memberships can enable 24/7 commerce and new customer engagement models. Global institutions and policymakers are actively exploring tokenisation in payments and capital markets, signalling a durable shift in how value moves. (Source: McKinsey)
• Productivity at scale with AI: For most organisations, AI has rapidly moved from a business experiment to an indispensable enterprise tool. From triaging service tickets to drafting content, AI is now embedded in day-to-day workflows. (Source: UK National Cyber Security Centre)

For most organisations, these benefits are becoming too significant to ignore. The question isn’t if or when businesses will use this next-generation digital infrastructure – it’s how to adopt it safely.

With great digital power comes new risks

While these benefits are considerable, organisations placing reliance on this new digital infrastructure will face new risks and challenges:

• Single points of failure in the tech supply chain: When a critical third-party tool breaks, the knock-on effects can be huge. In July 2024, a faulty update to the widely used CrowdStrike security platform triggered crashes on more than 8 million Windows systems, grounding flights and disrupting banks worldwide. This wasn’t a malicious hack – it was dependency failure at massive scale. (Source: The Verge)
• Losses in crypto/Web3 ecosystems: Poorly designed code, compromised keys or attacks on cross-network bridges and external data oracles can drain funds rapidly from crypto systems. During the first half of 2025, a total of over USD $2 billion worth of cryptocurrency was stolen worldwide – mostly in one mega-heist but also numerous smaller incidents. This underlines that the risk is real for any organisation utilising blockchain and digital assets. (Source: Chainalysis)
• AI-specific exposures: AI can leak sensitive data, enable convincing phishing scams, or infringe IP if not governed well. That’s why governments are publishing secure-by-design guidance and, in the EU, introducing the AI Act with phased compliance. Organisations must now treat AI as a core business capability that needs risk controls – not a side project. (Source: EU AI Act)
• Rising governance expectations. For organisations that operate in or serve the EU financial sector, the new Digital Operational Resilience Act (DORA) raises the bar on incident reporting, vendor risk and operational resilience. Even outside financial services, board-level cyber accountability is becoming the norm. (Source: EIOPA)

The pattern is clear: business value creation increasingly relies on digital infrastructure, code, data and third party systems. Outages and exploits now translate directly into interrupted revenue, regulatory exposure and brand damage.

How cyber insurance is responding to the changing landscape

The right cyber insurance can be a powerful shock absorber when digital infrastructure stumbles. The market response to a fast-evolving business world has focused on three practical areas:

• Explicit protection for key dependencies: Organisations need to increasingly look for cyber insurance policy wording that responds even when internal systems still work – but a critical third-party (such as cloud, payment gateway, security tool or content delivery network) fails and the business can’t operate. Some markets now offer parametric cover — a transparent, trigger-based approach that pays when, say, a named cloud service suffers defined downtime.
• Clearer treatment of large-scale and state-linked cyber events: Following market guidance, many policies now include model clauses that clarify how state-backed cyber attacks or truly systemic events are handled. Understanding these wordings — and what they mean for your balance sheet — is essential.
• Readiness and response built in: Beyond indemnity, strong cyber programmes should include access to forensics, legal counsel and crisis communications, plus readiness and response preparation. That shortens downtime and helps you meet regulatory timelines in the event of an outage.

How a cyber insurance specialist helps you turn risk into resilience

Costero’s Cyber, Media & Technology (CMT) team is focused on exactly these next-generation exposures. From venture-backed Web3 projects to multinational retailers and financial institutions, we design tailor-made cyber programmes that match how each organisation operates — and where dependencies sit. Cover is placed at Lloyd’s of London, across international markets, and with leading global reinsurers.

We translate tech into business impact. Together we map “where revenue meets risk”: which cloud services, payment rails, security agents, AI/LLM platforms and blockchain providers your operations rely on – and what happens to turnover if each goes down. The key question “What would stop the business trading?” anchors the right limits, sub-limits and deductibles.

We tailor coverage to the real world. Programmes can include:

• Third-party technology failure and dependent-business-interruption cover (including cloud/CDN/payment outages).
• Crypto/Web3 extensions where insurable (for example, theft following private-key compromise, social engineering, post-incident costs).
• AI-related media/IP and privacy cover, plus regulatory defence and investigation costs aligned to regimes like the EU AI Act and DORA.

Find cyber cover for digital business innovation

Whether you’re a business leader, or an insurer or broker with corporate clients, it’s time to explore the latest cyber insurance solutions for exploiting new digital business infrastructure with confidence.

To find out more and discuss your goals, please get in touch with our expert Jonathan Olley at Costero Brokers.

Explore the challenges faced by MGAs and coverholders in protecting commercial property against hurricane, flood and hail risks – and how Costero’s In-House Property Binder and Deductible Buy-Down solutions can help.

If you’re an MGA, insurer, broker or coverholder serving commercial clients along the U.S. Atlantic or Gulf coasts, you know how hard it’s become to secure the right property cover for your clients, at the right terms. Billion-dollar natural disasters are more frequent; deductibles keep creeping up; and properties in different states can have wildly different risk profiles.

In this article, we outline the exposures you’re wrestling with, highlight recent events underscoring the risk, and explain how working with an expert partner like Costero Brokers can help you respond quickly and confidently for your clients – with our In-House Property Binder and Deductible Buy-Down solutions.

The realities of extreme weather exposure for U.S. coastal states

The sheer concentration of people and property along the U.S. Atlantic and Gulf shoreline makes coastal losses uniquely impactful. U.S. coastal counties are home to roughly 40% of the nation’s population, despite representing less than 10% of contiguous U.S. land area. (Source: U.S. National Oceanic and Atmospheric Administration – NOAA) That concentration amplifies the consequences when wind, hail and flood strike.

Across Louisiana, Mississippi, Alabama, Georgia, Florida, Pennsylvania, Texas, New Jersey and New York, the peril mix varies: Gulf states may face more hurricanes and tropical remnants, while Atlantic states face ocean storm surges and nor’easters. And all of these states can suffer disastrous floods, and severe convective storms that drive costly hail and straight-line wind claims.

Recent events underline the scale of extreme weather risk

NOAA’s Billion-Dollar Disasters database shows how frequently these hazards now translate into multi-billion-dollar economic shocks. In 2024, the U.S. suffered 27 separate billion-dollar weather and climate events – the second-highest count on record.

The July 2025 Central Texas floods were a stark reminder that catastrophic events in coastal states are not confined to the immediate coastline. As of late July, media and official tallies reported at least 135 fatalities across multiple counties, with damage to tens of thousands of homes and businesses. The human impact was devastating; the economic impact will echo for years. (Source: Forbes)

From an insurance perspective, several early assessments point to a large gap between total economic losses and insured losses. Analytics firm Cotality estimated about $1.1 billion in damage to residential buildings and roughly $135 million in potential claims to the National Flood Insurance Program (NFIP). Reinsurer Aon highlighted that low flood insurance take-up in the hard-hit rural areas would likely limit industry-wide insured losses, even as total economic losses run into the billions. Other sources pegged overall damage (economic, not insured) in the $18–22 billion range. The signal is clear: extreme weather risks such as floods remain dramatically under-insured, and percentage deductibles are leaving many policyholders to carry significant costs on catastrophe claims.(Sources: Insurance Journal, Reinsurance News)

Finding the right property cover for coastal states is challenging

If your clients own commercial property in U.S. coastal states, risk and insurance complexity increase:

• High catastrophe deductibles: Many coastal policies carry percentage deductibles (hurricane, named storm or wind/hail) that can run to several points of Total insurable value (TIV) – materially higher than standard all-perils deductibles. That’s a rational market response to volatility, but it also leaves insureds with significant retained loss on exactly the claims they’re most likely to have.
• Coverage patchiness – especially for flood: The Texas floods once again showed how low insurance take-up in many communities leaves a protection gap that becomes a liquidity crisis after an extreme weather event. Even where NFIP or private-market flood is purchased, deductibles can still be steep.
• Timing and execution risk: In a fast-moving market, you need speed to bind opportunities and retain accounts. Those that can assess and respond quickly win the business; those that can’t, don’t.

Advantages of working with an extreme weather expert in the London market

Working with a Lloyd’s of London market specialist for extreme weather coverage gives you breadth of market and depth of expertise in one place. In 2025, reinsurer appetite has improved, cat-bond and alternative capital issuance are high, and capacity is broadly competitive – yet outcomes still vary by risk quality and how the programme is presented. A partner who understands both U.S. coastal realities and London capacity can shape market interest, structure solutions around hotspots, and accelerate turnaround on quotes.

That’s why working with Costero Brokers makes such a difference to so many leading U.S. MGAs, insurers, brokers and coverholders. Our coastal property team places business directly with Lloyd’s of London syndicates, provides rapid (typically under 24-hour) turnaround on quotes, and brings capacity across U.S. coastal states – with a pragmatic willingness to look at commercial risks within typical coastal proximities. We work through U.S. licensed wholesalers and retailers and focus on solutions that are clear, quick and service-led.

Swift certainty with Costero’s In-House Property Binder

Our In-House Property Binder solution gives you a streamlined route to all-risks and wind-only solutions supported 100% at Lloyd’s of London. In a market where timing matters, having an in-house facility helps you quote and bind quickly, create consistency across a schedule, and access meaningful coastal capacity without having to assemble a new line-up for every placement. For your clients, that can translate into fewer friction points, clearer terms, and a smoother experience.

Because the binder is operated by a team that lives and breathes coastal property, you also get real-world underwriting dialogue: we understand construction class, ROOF age, proximity to water, secondary protections and the other drivers that move the needle with capacity providers. And speedy turnaround of quotes is central to the design of our solution.

Making deductibles manageable with our Deductible Buy-Down solution

Rising catastrophe deductibles will naturally be a pain point for many of your clients. A Deductible Buy-Down lets you reduce that retained loss for defined perils, improving liquidity right when it’s needed most.

Costero’s Deductible Buy-Down facility has operated for years in the U.S. market, supporting buy-downs for wind, hail, flood, earthquake and more. It’s a straightforward indemnity solution that does exactly what it says on the tin – when the peril hits and the base policy responds, the buy-down steps in to shrink the client’s out-of-pocket costs.

Our Deductible Buy-Down solution brings major benefits for your clients and your relationship with them:

• Protect client EBITDA and cash flow: A lower deductible for your client’s extreme weather claim can turn a balance-sheet shock into a manageable hit – especially important for businesses in hurricane belts or hail corridors.
• Support account retention: Giving clients a choice on deductible structure helps you keep the account when base-market terms harden.
• Complement base cover: You can pair a competitively priced base policy (with a higher cat deductible) and then use the buy-down to restore affordability and resilience.
• Capacity in all U.S. States (including Hawaii), from single location to multi state schedules, and most occupancies are considered.

We’re ready to help meet your extreme weather cover challenges

Tell us about your client’s property and we’ll turnaround a quote quickly, working with your preferred wholesale partners. For complex schedules, we can help structure a clear, cohesive placement strategy and layer in a Deductible Buy-Down where it adds the most value. Our aim is simple: strong cover, fast decisions, no drama.

If you’re placing or renewing coastal property this season – particularly along the Gulf and Atlantic seaboard – let’s talk. Reach out to discuss how Costero’s In-House Property Binder and Deductible Buy-Down can help you deliver stronger outcomes for your clients in coastal states.

To learn more about how we can help you navigate the challenges of extreme weather cover, get in touch with our expert, Rob Withers at Costero Brokers.

In an increasingly volatile world, organisations with personnel operating in geopolitical hotspots face unprecedented risks. From armed conflicts and political unrest to kidnappings and terrorist threats, the safety of overseas staff is a paramount concern. Crisis management insurance offers a vital safety net, ensuring that organisations can respond effectively to emergencies and protect their most valuable assets – their people. Costero Brokers specialises in providing tailored crisis management insurance solutions, offering expertise and support to navigate these complex challenges.

Navigating the risks of global operations in threat zones

Deploying personnel to regions fraught with instability presents multifaceted challenges for many kinds of organisations, such as:

• Multinational corporations (MNCs): Large companies with global operations often send staff to manage projects, oversee supply chains, or set up new offices in regions that may experience instability.
• Manufacturing and construction Firms: Companies producing goods or involved in building infrastructure, such as roads, bridges, or factories, often send project managers, engineers, and technical experts to regions that might be experiencing political or social unrest.
• Energy and mining companies: Firms in the oil, gas, and mining sectors frequently have operations in remote or geopolitically sensitive areas, requiring them to station personnel on-site.
• Media organisations: News agencies and media outlets send journalists, photographers, and support staff to cover stories in conflict zones and areas of political unrest.
• Non-governmental organisations (NGOs) and non-profits: Humanitarian and development NGOs often operate in conflict zones to provide aid, education, and infrastructure support.
• Healthcare organisations: International healthcare providers and medical charities may send doctors, nurses, and support staff to provide care in crisis zones.

Facing a global landscape of evolving risks

All these kinds of organisations often face risks from operating in areas where the geopolitical situation is unpredictable. Recent events underscore the severity of these risks (source: S&P Global):

• Middle East conflicts: The escalation of hostilities in certain regions and the broader Middle East has disrupted many international organisations’ operations and endangered personnel.
• Russia-Ukraine war: The ongoing conflict has not only affected the immediate area but has also had ripple effects on global security and economic stability.
• Kidnapping incidents: Recent years have seen a notable increase in kidnapping cases targeting foreign workers and executives in various regions, including parts of Africa and Latin America.

Evolving regional risk situations like these highlight the critical need for organisations to adopt comprehensive crisis management strategies – to safeguard their personnel working overseas and maintain operational continuity. A key element of such a strategy is specialist crisis management insurance.

Let’s consider 7 ways crisis management insurance can help protect an organisation’s overseas personnel:

1. Access to crisis management experts

Having immediate access to crisis management professionals can be invaluable for an organisation’s leaders and overseas employees. Insurance coverage can provide:

• 24/7 support: Round-the-clock assistance from crisis response teams.
• Strategic guidance: Expert advice on handling complex situations.
• Training and preparedness: Resources to educate staff on risk mitigation.

These services empower organisations to prepare against and respond effectively to crises, safeguarding personnel and assets.

2. Protection against political violence and terrorism

Operations in unstable regions are susceptible to political violence and terrorist acts. Insurance coverage can include:

• Property damage: Compensation for damages resulting from riots, strikes, or terrorist attacks.
• Business interruption: Coverage for losses due to operational disruptions.
• Security assessments: Risk evaluations to inform safety protocols.

This protection helps organisations improve safety, mitigate financial losses and resume operations promptly.

3. Kidnap and ransom coverage

In many high-risk regions, the threat of kidnapping is an everyday reality for overseas workers. Crisis management insurance for kidnap and ransom incidents can provide organisations with:

• Expert response: Access to seasoned crisis response consultants who guide organisations through negotiations and recovery efforts.
• Financial protection: Coverage for ransom payments, extortion demands, and associated costs.
• Repatriation services: Arrangements for the safe return of affected individuals.

This coverage ensures that organisations can respond swiftly and effectively to kidnap incidents, minimising harm and disruption.

4. Coverage for active assailant incidents

The occurrence or threat of active assailant incidents (involving use of firearms, knives or other weapons) necessitates specific coverage, including:

• Medical expenses: Compensation for injuries sustained by employees.
• Psychological support: Access to counselling services for affected individuals.
• Liability protection: Coverage for legal liabilities arising from such incidents.

This comprehensive cover addresses both the immediate and long-term impacts of such traumatic events.

5. Support for denial of access and loss of attraction

Crises can lead to restricted access to facilities or deter clients and partners. Insurance solutions can offer:

• Financial compensation: Coverage for losses due to decreased footfall or access restrictions.
• Operational support: Assistance in maintaining business continuity during disruptions.

This support helps organisations navigate the logistical and economic challenges posed by crises.

6. Evacuation and repatriation assistance

In the event of sudden political upheaval war or natural disasters, timely evacuation is crucial. Insurance solutions can offer:

• Emergency evacuation: Coordination and funding for the rapid removal of personnel from danger zones.
• Travel arrangements: Logistical support for transportation and accommodation during crises.
• Medical support: Access to medical care and evacuation if necessary.

These services are vital for ensuring the safety and well-being of affected staff during regional emergencies.

7. Tailored solutions for evolving risk profiles

Recognising that each organisation has unique needs and faces ever-changing risks, flexible and dynamic crisis management insurance can provide:

• Customised policies: Coverage tailored to specific operational risks and geographic exposures.
• Flexible terms: Adaptable coverage options to suit various organisational structures.
• Scalable solutions: Policies that grow with the organisation’s expanding global footprint.

This adaptability ensures comprehensive protection aligned with organisational objectives.

Partnering with a crisis management expert for comprehensive protection

Navigating the complexities of global operations and regional risks requires a trusted partner. Costero Brokers brings extensive experience in crisis management insurance, offering:

• Expertise: In-depth knowledge of global risks and insurance solutions.
• Customisation: Tailored policies that align with your organisation’s specific needs.
• Support: Dedicated assistance throughout the policy lifecycle, from risk assessment to claims management.
• Agility: Through our terrorism portal, you can quote and bind a terrorism risk within around 60 seconds.

We work closely with specialist syndicates at Lloyd’s of London, and leading global reinsurers, to create bespoke insurance solutions for each client.

Whether you’re an insurer, broker, MGA or directly responsible for protecting an organisation and its overseas personnel, now is the time to take proactive measures. With specialist insurance solutions from Costero Brokers, organisations can enhance their resilience and ensure the safety of their personnel in an unpredictable world.

Talk to our Crisis Management team today about insurance protection for organisations and overseas personnel in global high-risk zones. To find out more, get in touch with our expert, Freddie Tyler at Costero Brokers.

In 2025, geopolitical dynamics, economic shifts, and technological advancements are influencing risks and opportunities for insurers and brokers worldwide. As we navigate an ever-evolving insurance landscape, this report provides a concise overview of key trends and developments shaping the global insurance market today.

The UK and Global Economy

• UK economy: UK inflation eased slightly to 3.4% in May, down from 3.5% in April, driven by lower transport costs but offset by sharp food price increases – including a 17.7% rise in chocolate prices due to poor West African harvests. The Bank of England held interest rates at 4.25%, citing ongoing inflationary pressures and global uncertainty. For insurers, this signals continued pricing strain across long-tail and property lines, as persistent inflation affects claims severity and reserving assumptions, while delaying monetary easing that could improve investment returns. Inflationary resilience remains a critical variable for underwriting strategy in H2 2025. (Sources: The Guardian, BBC News)
• U.S. economy: During June, the U.S. Federal Reserve held interest rates at 4.25–4.50%, cautioning that although two rate cuts are still anticipated by year-end, the pace of future easing – especially in 2026–27 – will be “slower” due to ongoing inflation pressures tied to trade and geopolitical tensions, warning of persistent inflation potentially running near 3 % next year. For insurers, this signals prolonged pressure on investment income and discount rates used in reserving models. Meanwhile, the Fed’s tempered tone may lead to more stable yield environments, requiring recalibrated ALM strategies and careful product pricing as monetary conditions evolve through H2 2025 and beyond. (Source: Reuters)
• Global economy: The International Monetary Fund (IMF) April 2025 World Economic Outlook projects a global growth slowdown to 2.8% in 2025 (down from 3.3% in January), with advanced economies expanding just 1.4% and the U.S. at 1.8%, amid escalating trade tensions and policy uncertainty. Headline inflation is forecast to ease gradually to around 4.3%, but multi-year high input costs and unresolved global trade disruptions threaten cost inflation. For insurers, this means claims inflation may remain elevated and investment returns subdued, necessitating tighter reserving and premium recalibration strategies for product lines sensitive to economic and pricing volatility. (Source: IMF)

Insurance Industry Developments

• Premiums and capacity: Global commercial property insurance premiums fell 6% in Q1 2025, accelerating from a 3% drop in Q4 2024, as ample market capacity and reduced reinsurance costs fuelled pricing relief. The UK saw a mirrored 6% decline, while the US and Pacific recorded steeper 9% reductions. This trend is attributed to aggressive competition and attractive reinsurance pricing, with insurers offering enhanced terms and lower deductibles. Despite softer pricing, underwriting discipline persists – poor-quality or high-loss accounts still face less favourable renewal terms. Insurers and brokers should prepare for continued market softening, particularly if reinsurance pricing remains stable. (Source: Artemis)
• Specialty lines: Directors & Officers (D&O) and professional indemnity premiums continue to see marginal increases, driven by legal and regulatory pressures across the UK and US. Intensifying competition and capacity influx – particularly in the US – have driven rates lower, though underwriters are adopting more sustainable pricing strategies across regions . London remains a preferred region, offering broader coverage and flexibility on sub-limits and entity investigation endorsements. In the UK and Europe, rising claim frequency – especially in insolvency and employment disputes – and increased legal and regulatory scrutiny are pressuring margins, prompting market stabilisation with fewer rate reductions. Insurers are responding with long-term agreements and enhanced policy features, signalling a shift toward disciplined growth and coverage depth. (Source: Gallagher Specialty)
• Regulatory developments: The UK’s Prudential Regulation Authority (PRA) issued new guidelines in April focusing on climate-related disclosures, calling on insurers to enhance transparency regarding their climate risk exposure and mitigation strategies. The PRA warned that banks and insurers have significant “gaps” in how they assess and manage both physical and transition climate risks, instructing firms to conduct internal reviews – with a follow-up compliance review in six months. (Source: Global Regulation Tomorrow)

Underwriting Performance

• London market: Lloyd’s of London is experiencing continued strong performance, according to an April 2025 report from the Lloyd’s Market Association (LMA) and ICMR. Gross written premiums in 2024 reached GBP £55.5 billion, with underwriting profit across nearly all syndicates and a pre-tax profit of £9.6 billion. Major claims – such as two U.S. hurricanes – totalled 7.8% of premiums, still below long-term averages. The report also outlines strategic priorities for 2025, including digitisation, regulatory engagement, technical expertise, and cultural transformation across the Lloyd’s market (Source: Lloyd’s Market Association)
• London outlook: In its Q2 2025 Market Message, Lloyd’s of London stressed a strategic shift towards “risk awareness, not risk aversion”, highlighting the need for disciplined underwriting amid fragile market conditions, reflected by a subdued Q1 risk-adjusted rate change of -3.3%. Lloyd’s senior leadership urged realistic syndicate strategies, enhanced scrutiny on claims performance, and proactive capital management to address macroeconomic uncertainties, signalling a decisive move towards profitability and operational efficiency. (Source: Reinsurance News)

Tech, Cyber and AI Developments

• Cyber attacks target insurers: Cyber incidents escalated notably in Q2 2025, affecting the insurance industry directly. In June, U.S. insurer Aflac revealed that a “sophisticated cybercrime group” had infiltrated its network via social engineering tactics, potentially compromising sensitive customer information – including social security numbers, health, and claims data. However, no ransomware was detected and core services remained operational. The insurer swiftly engaged third-party cybersecurity experts and contained the breach within hours. This incident is part of a broader wave of attacks targeting the insurance sector, with indications that the “Scattered Spider” hacker gang may be responsible. Insurers should reinforce employee training and incident response protocols as exposure risks escalate. (Source: Reuters)
• AI legislation: The European Union’s new AI Act has now entered into force, with rules for generative Artificial Intelligence applying from August. While the EU introduces a formal regulatory framework, the UK favours a flexible, principles-based model, empowering sectoral regulators like the FCA and PRA to oversee AI deployment in financial services – including insurance – with no new central AI authority required . With 75% of firms already using AI, including for credit risk and capital management, the UK Treasury and regulators are conducting ‘Calls for Evidence’ and market reviews to ensure governance remains robust. This approach balances innovation with oversight and enables insurers to adopt AI solutions while maintaining ethical and operational controls. (Source: KPMG)

Reinsurance Market

• Record cat bond quarter: Catastrophe bond issuance is projected to exceed USD $10 billion In Q2 2025, marking the first-ever quarter to hit this milestone, as demand from cedants and investors surges. This underscores growing reliance on insurance-linked securities (ILS) for alternative reinsurance capital and reflects investor appetite for diversified, yield-enhanced vehicles in a low-corruption insurance environment. Reinsurers and brokers should anticipate continued high ILS activity into H2 2025. (Source: Artemis)
• Buyer-friendly renewals: Annual renewals in April – spanning the US, Japan, South Korea, India, and beyond – were highly competitive and buyer-friendly, with ample capacity and price reductions seen in loss-free P&C and cat accounts. This trend reflects continued strong reinsurer appetite and disciplined underwriting following a benign catastrophe season. (Source: Insurance Journal)

Natural Catastrophes

• U.S. severe storms: A series of severe convective storms (SCS) and tornadoes across the central and eastern U.S. in May – most notably in St. Louis, Missouri and Laurel County, Kentucky – are estimated to have caused insured losses of up to $7 billion, ranking among the costliest SCS events in U.S. history. So far in 2025, SCS losses for U.S. insurers have surpassed $20 billion. (Source: MST)
• Global catastrophe losses: According to an April 2025 report from Swiss Re, global insured losses from natural catastrophes reached USD $137 billion in 2024, and are projected to grow to approximately $145 billion in 2025, aligned with a long-term annual growth trend of 5–7%. Among the disasters contributing most to the accumulation of losses were hurricanes Helene and Milton, severe convective storms (SCS) in the US, large-scale urban floods around the world and the highest ever recorded natural catastrophe insured losses in Canada. (Source: Swiss Re)

Geopolitical Risks

• Gulf marine premiums jump: Geopolitical volatility remains elevated in Q2 2025, notably due to continuing tensions around conflicts in Ukraine and the Middle East. Marine insurance premiums for hull and machinery cover on vessels transiting the Strait of Hormuz jumped by over 60% in June, rising from around 0.125% to approximately 0.2% of vessel value – an increase strongly linked to ongoing hostilities between Israel and Iran. (Source: Insurance Business)
• Tariff tensions: The complex situation around U.S. trade tariffs continues to evolve. In May, a three-judge panel of the U.S. Court of International Trade ruled that tariffs introduced via the 2025 International Emergency Economic Powers Act (IEEPA) were unlawful. While the decision is under appeal and a temporary stay allows tariffs to remain, insurers exposed to marine cargo and trade risks should monitor renewed uncertainty in trade flows, supply chain stability, and refinancing of trade credit coverage. (Source: The Guardian)

Looking ahead..

As we progress further through 2025, Costero Brokers remains committed to supporting our clients and partners in navigating their challenges. Our expertise and insights are here to help you make informed decisions and seize opportunities in a rapidly changing market.

For more detailed analysis and resources, visit our website or contact us.

Disclaimer:

This market report was developed for reference only, and any prospective statements about possible future events or performance are based on developing factors regarding economic and business activity relevant to financial and insurance markets. Such prospective statements involve risk as actual results may differ materially from those expressed or implied due to future changes in relevant factors. We are not responsible for the accuracy of the third-party information cited herein and undertake no obligation to update any such data or prospective statements, nor do we in any way intend to provide legal, financial, or insurance advice regarding any existing or future litigation or other matter discussed or projected herein. Please seek the advice of your own professional advisors or counsel regarding your specific circumstances.

Learn why media liability insurance is now vital for all kinds of public-facing organisations, including retailers, brands and non-profits.

In an age where every organisation has become its own publisher, the risks traditionally associated with media companies are now a pressing concern for non-media businesses too. Retailers, brands, non-profits and other organisations are increasingly exposed to media liability risks through their social channels, websites, media partnerships and marketing content. This article explores the evolving media risk landscape and how partnering with a specialist like Costero Brokers can ensure these organisations are adequately protected with bespoke insurance solutions.

The expanding media risk landscape for non-media organisations

Public-facing organisations such as retailers, brands, and non-profits are embracing content creation to engage audiences, raise awareness, build loyalty, fund-raise or drive sales. From publishing newsletters and launching marketing campaigns to engaging with followers on social media or collaborating with influencers, these organisations are now actively involved in content dissemination. While this offers new opportunities, it also opens the door to a growing array of risks.

Some of the most common media liability exposures include:

• Defamation and libel: A social post, advert, or article could inadvertently harm someone’s reputation, leading to legal action.
• Copyright and trademark infringement: Using an image, piece of music or even a slogan without proper licensing can result in costly disputes.
• Invasion of privacy: Publishing personal data or images without consent can breach privacy laws.
• Misleading marketing or advertising: Unsubstantiated claims or endorsements, including by paid third-party influencers, can lead to regulatory action.

These risks extend across an evolving variety of media channels, activities and platforms, such as:

• Social media (including Instagram, X/Twitter, LinkedIn, Facebook, TikTok)
• Websites and blogs
• Advertising and marketing communications
• Podcasts and video streaming
• Printed promotional material and in-store displays
• Quotes in the press or broadcast appearances
• Media tie-ins with partners and third-parties

Unfortunately, many of today’s media exposures are often not covered under standard commercial general liability (CGL) or public liability insurance policies. As noted in this article by law firm Hunton, many businesses mistakenly believe they are fully protected, only to find that media-related claims fall outside the remit of their existing coverage.

Real-world consequences: High-profile media liability cases

The business and reputational impacts of media liability cases can be severe. Here are some recent notable examples:

• Regulatory penalties: The U.S. Federal Trade Commission (FTC) recently issued formal warning letters to brands including Coca-Cola, Walmart, and nearly 700 other companies, cautioning them about the potential for civil penalties due to misleading practices involving social media influencers and product endorsements. The FTC flagged concerns over inadequate disclosure of paid partnerships and endorsements that could deceive consumers – highlighting how brands outside the traditional media sector face growing scrutiny and liability exposure for content shared by or through third parties. This serves as a clear example of how retailers and consumer brands can face regulatory and reputational risks related to the media they disseminate or sponsor online. (Source: Emarketer)
• Copyright crackdowns: Organisations penalised for using unlicensed copyrighted music on social channels recently have ranged from cosmetics brands to sports teams. A high-profile example has involved U.S. restaurant chain Chili’s, which faced a copyright lawsuit from Universal Music Group (UMG) in early 2025. UMG alleged that Chili’s used 62 of its songs in its Instagram and TikTok videos without permission, including Frank Sinatra’s “Fly Me To The Moon” and Ariana Grande’s “7 Rings”. This was the second lawsuit Chili’s faced in three months, as the Beastie Boys had previously sued them for using their song “Sabotage” in a social media ad. (Source: Miami Law Review)

In situations like these, specialist media liability insurance can provide protection, helping to cover legal costs, settlements, and crisis management services.

The power of specialist media liability insurance

Media liability insurance offers a tailored solution for these evolving exposures. Unlike broad commercial policies, specialist media liability coverage is designed specifically for content-related risks. It can provide protection against accidental incidents of:

• Infringement of copyright, trademark, or other IP rights
• Libel, slander, and defamation in media
• Breach of privacy or publicity rights
• Negligent publication or misstatements
• Breach of licence terms or scope

Optional sub-limited extensions may include:

• Regulatory defence costs
• Public relations expenses
• Mitigation costs (e.g., withdrawing or modifying content)

With media liability insurance in place, organisations can communicate confidently in all media, knowing they have comprehensive protection for the content they create, sponsor or share.

How an expert in media liability insurance can help you

At Costero Brokers, our Cyber, Media and Technology (CMT) team specialises in crafting bespoke media liability insurance programmes for all kinds of organisations. Whether you’re an insurer looking to place complex media risks, a broker working with content-active clients, or a business leader seeking to safeguard your brand, we can help.

We work closely with leading underwriters at Lloyd’s of London and top-tier international reinsurers to offer you:

• Broad, fit-for-purpose cover that reflects the specific risks of your sector.
• Competitive premiums backed by expert underwriting.
• Support for complex, hard-to-place or high-profile risks.

We understand that each organisation is different. That’s why we don’t take a one-size-fits-all approach. Instead, we partner with you to develop solutions that align with your activities, strategy, and operational footprint.

Ready to safeguard your media content and reputation?

Modern media presents endless opportunities for growth and engagement, but it also comes with new liabilities. With the right insurance partner, you can turn risk into resilience. Costero Brokers can help you obtain a media liability insurance programme tailored to your needs – whether you’re an insurer or broker seeking solutions for a client, or you’re from an organisation that creates and shares content.

Get in touch today to discuss how we can protect your reputation, enable bold communication, and empower you to embrace the media landscape with confidence.

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

Learn how the growing wave of AI-related law cases is driving the need for specialist insurance coverage that protects business innovators.

As artificial intelligence (AI) becomes an integral part of how organisations operate, so too do the risks associated with its use. From hallucinations and copyright infringement to algorithmic bias and privacy breaches, the potential liabilities are evolving rapidly – and few companies are fully prepared.

In this article, we explore the emerging landscape of AI-related risks, share examples of how these risks are already playing out in real-world scenarios, and explain how Costero Brokers is helping insurers, brokers and businesses globally stay ahead of the curve with custom-built AI liability insurance programmes.

AI business liability in the news

Several recent high-profile cases illustrate the harmful business impacts that AI-related liabilities can cause. A particularly topical example involves Facebook parent company Meta, which is facing legal action for allegedly training its AI models on pirated digital books – effectively breaching the copyrights of thousands of authors. If the case is successful, this could lead to substantial financial penalties and reputational damage. (Source: BBC News)

An important and long-running law case over AI liability is the litigation by Thomson Reuters against AI startup Ross Intelligence, over alleged training of an Ai model with unlicensed content from the Westlaw legal database. Running since 2020, this case has marked an early and significant legal challenge over how AI systems use copyrighted material – and has become a key precursor to today’s broader legal cases brought against companies that develop and use AI systems. (Source: Skadden Legal News)

As AI has moved into the business mainstream over the last few years, dozens of other legal cases have been filed in the US and worldwide over liabilities from the development, training and usage of AI. The outcome of these cases could reshape copyright law, redefine the boundaries of fair use in AI training, and have major implications for the future of AI across all industries and business sectors. (Source: Wired)

The evolving business insurance landscape of AI risk

Whether an organisation today is buying, customising, or developing AI systems, the adoption of AI introduces a new spectrum of risks – some familiar, many entirely unprecedented – requiring a new insurance approach. These risks include:

• Performance failures: Where an AI system fails to deliver accurate or reliable outputs, potentially causing financial loss or operational disruption.
• Bias and discrimination: Inadvertent algorithmic bias could lead to discriminatory outcomes in hiring, lending, or healthcare decisions, attracting regulatory scrutiny and legal action.
• Privacy breaches: AI models trained on sensitive or unprotected data can expose personally identifiable information (PII), creating compliance liabilities.
• Intellectual property (IP) infringement: Generative AI models may produce content that closely resembles protected works, risking claims of copyright violation.
• Hallucinations and misinformation: Especially in large language models (LLMs), outputs may appear plausible but be factually incorrect—undermining trust and exposing businesses to reputational or legal consequences.

The complexity and uncertainty around these risks can create gaps in traditional insurance coverage, making it essential to work with experts who understand how to navigate and mitigate them.

Insurance solutions built for AI risks

Generic or traditional business insurance policies often fall short of covering AI-related liabilities. This is why new specialist AI liability insurance is increasingly important.

Costero’s AI insurance solutions, developed in partnership with leading global reinsurers, address the unique risk categories associated with AI, including:

• Performance guarantees: Ensuring that an AI solution performs as promised. If underperformance occurs, policyholders are compensated based on agreed thresholds.
• Own damages insurance: Covers financial loss due to underperformance of internally developed AI systems—protecting against business interruption, reputational damage, or increased operational costs.
• Legal liability coverage: Insures against third-party claims arising from biased outputs, IP infringement, data privacy violations, and more.

These covers are carefully crafted to match each client’s specific AI risk profile, with pricing models that evolve alongside exposure.

Finding the right partner for AI liability protection

As a specialist in insurance for technology, cyber and media, Costero offers insurers, brokers and businesses access to expert support in navigating the evolving risks of AI. Our AI liability insurance programmes deliver a range of major benefits and advantages, being:

• Custom-built: We don’t deal in standard templates for business cover. Every policy is individually negotiated to ensure it addresses your client’s exact exposure.
• Globally connected: Through our access to Lloyd’s of London and international markets, we provide fit-for-purpose and competitively priced cover from leading global reinsurers.
• Technically informed: We work with AI-specialist underwriters and actuaries who understand the specific risks associated with different AI model architectures – from foundation models to fine-tuned systems.
• Future-ready: As AI regulation and litigation evolve, so too do our coverage options. We continuously update our programmes to reflect the latest risk, legal and technological developments.

Whether you’re an insurer looking to build new AI-focused capacity, a broker looking for a trusted wholesale partner, or an organisation seeking protection for your in-house AI models and usage, we have the expertise to help you stay ahead of the curve.

Let’s talk about your AI liability insurance needs

AI brings immense business potential – but also unprecedented risks. Whether an organisation builds AI, deploys it, or simply relies on it, insurance needs to keep up. Don’t leave your business or clients exposed to liabilities that traditional policies were never designed to handle.

Talk to Costero to create an AI liability insurance programme designed around your unique needs. Our solutions empower organisations to confidently adopt AI and maximise its benefits – without suffering the potential negative impacts.

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

Learn why a responsive in-house claims service matters in marine and cargo insurance – and the advantages of a truly integrated broker team.

When it comes to protecting vessels and freight with marine and cargo insurance, a well-crafted policy is only part of the solution. The real test of value comes when you need to make a claim. Whether you’re a shipowner, an organisation moving goods across the globe, or an insurer or broker serving these clients, the speed and quality of claims handling can have a huge impact on operational continuity and financial stability. That’s why finding an expert partner who not only understands the complexities of the marine sector but also offers in-house claims expertise – such as Costero Brokers – is more important than ever.

This article explores why an efficient claims service is mission-critical in today’s marine and cargo environment. We’ll look at recent high-profile incidents, emerging risks in the shipping world, and how Costero’s integrated claims and underwriting team brings clarity, speed and confidence when it’s needed most.

Real-world marine and cargo incidents: The cost impacts

Recent years have shown that shipping incidents aren’t just occasional problems – they’re major, multimillion-dollar disruptions that can send shockwaves through global supply chains.

• March 2025 North Sea collision: In one of the most notable marine incidents of this year so far, the container ship Solong collided with the tanker Stena Immaculate off the eastern coast of England. This caused major structural breaches, explosions and fires, spilling some of the tanker’s cargo of jet fuel, and releasing thousands of tiny plastic pellets or ‘nurdles’, resulting in pollution of nearby waters and coasts. Crews from both vessels were rescued, but one crew member is missing, presumed lost. Total insured losses are expected to fall between $100 million and $300 million. As investigations continue, insurers and brokers are closely watching the case to assess how quickly and effectively the claims are resolved. (Sources: Sky News, Offshore Energy News)
• March 2024 Baltimore bridge collision: Massive disruption resulted when cargo vessel MV Dali struck and brought down the Francis Scott Key Bridge in Baltimore, USA, killing six bridge maintenance workers. The collapse blocked shipping access to the Port of Baltimore for 11 weeks. Estimates of insured losses have ranged up to $4 billion, raising critical questions about liability, third-party claims, and the global insurance market’s readiness to adapt to high-stakes incidents. (Sources: Lockton Re, Reinsurance News)
• March 2021 Suez Canal blockage: The most financially impactful marine and cargo incident so far this decade occurred when the 224,000-ton container ship Ever Given ran aground in the Suez Canal, Egypt. The resulting six-day blockage of one of the world’s busiest trade routes became the most expensive logistical standstill in recent memory. Estimates placed the economic loss at $9.6 billion per day. The fallout included thousands of cargo claims and years of litigation – a harsh reminder of why rapid and expert claims support is indispensable when global trade grinds to a halt. (Source: KSA Insurance)

Understanding today’s risk landscape in marine and cargo

Today’s marine and cargo risk landscape is multifaceted, constantly shifting, and shaped by major drivers such as:

• Climate change and extreme weather: Rising sea levels, more frequent hurricanes, and unpredictable storm patterns are increasing the physical risk to vessels, ports, and cargo.
• Geopolitical instability: Conflicts like the war in Ukraine and attacks on shipping routes in the Red Sea are disrupting trade and adding volatile layers of risk for ship-owners, cargo businesses and insurers alike.
• Cyber attacks: As the maritime sector becomes more digitised, the risk of cyber incidents grows. Whether this involves ransomware attacks on port infrastructure or GPS spoofing of vessels, the potential for loss is significant – and still poorly protected against in many cases.

Together, such factors highlight that having the right insurance cover is only half the battle. When disaster strikes, you need to know that your insurance partner has the ability to act fast, understand the urgency of claims, and stand shoulder to shoulder with you in the complex resolution process ahead.

What Makes a great marine and cargo insurance partner?

In such a high-stakes environment, your insurance partner should be doing more than just offering cover. They should provide:

• Bespoke policy structures tailored to the cargo, routes, and vessels involved.
• Deep technical expertise in marine underwriting – with direct access to Lloyd’s of London and global reinsurance markets.
• A responsive, in-house claims service that understands the urgency of your situation and acts on your behalf to manage surveys, documentation, and settlement from day one.

As Jason Crowhurst, Head of Marine Claims at Costero Brokers, notes:

“Those first few hours or days after a loss incident are the most important. That’s when clients need proactive support, coordination and answers. Whether it’s deploying a surveyor to a port or liaising with underwriters to confirm reserves, we’re hands-on from the start.”

Unlike many brokers that outsource claims handling to third-parties, Costero’s in-house claims team works alongside our underwriting team – ensuring real-time communication, quicker decision-making, and ultimately a smoother claims journey.

Integrating seamless claims with marine and cargo cover

At Costero Brokers, we believe marine and cargo insurance is a dynamic, high-risk space where responsiveness is everything. That’s why our clients benefit from:

A dedicated in-house claims team that handles everything from small cargo losses to major marine liability incidents.

Tight integration with our marine underwriting specialists, allowing for more accurate reserving, quicker settlements, and less friction during renewals.

Global reach via Lloyd’s of London and international reinsurance markets, ensuring comprehensive, competitively priced solutions backed by world-class coverage.

As Costero’s Jason Crowhurst explains:

“When our clients need to make a claim, we don’t hand them off to a third-party. We step up immediately and take action on their behalf. That includes coordinating surveyors, dealing with local brokers, advising underwriters, and reassuring the client every step of the way.”

For cargo owners and ship operators, that means faster return to operations and more confidence in their risk strategy. For brokers and insurers, it means more satisfied clients and better control of exposure.

Peace of mind at all times – and confidence when you need it most

Efficient claims handling isn’t just about ticking boxes – it’s about giving you peace of mind that, when the unexpected happens, your business won’t grind to a halt. A well-handled claim is often what defines your insurance partner’s value, especially when vessels or assets are stuck at sea, delayed in port, or damaged in transit.

Whether you’re a shipowner needing robust cover and true support, an organisation shipping cargo worldwide, an insurer looking to place a complex marine programme, or a broker seeking a reliable wholesale partner, Costero offers more than just policies – we provide a trusted partnership.

Let’s talk about your marine and cargo insurance needs

Ready to create a marine and cargo insurance solution that gives you end-to-end confidence? Speak to the team at Costero Brokers. Our experienced, responsive and in-house claims team works hand-in-hand with our underwriters to deliver cover that works – and support that delivers more for you.

To learn more about our marine and cargo insurance solutions and discuss your goals, please get in touch with our expert Jack Nicholson at Costero Brokers.

In 2025, geopolitical dynamics, economic shifts, and technological advancements are influencing risks and opportunities for insurers and brokers worldwide. As we navigate an ever-evolving insurance landscape, this report provides a concise overview of key trends and developments shaping the global insurance market today.

The UK and Global Economy

• UK inflation rose to 3% in January 2025, up from 2.5% in December 2024, marking its highest level in ten months. According to The Guardian, this unexpected increase was driven by rising costs for food, transport, and private education following VAT policy changes. The inflation surge complicates expectations for early interest rate cuts by the Bank of England. Economic pressures, including energy costs and rising household expenses, are expected to sustain inflationary trends, impacting both businesses and consumers in the months ahead.

• US inflation also rose to 3% in January 2025, marking its highest level in six months. According to BBC News, the increase was driven by higher costs for essentials like food, energy, car insurance, and transportation. Analysts now predict interest rates may remain elevated for longer.

• Globally, the IMF highlights a steady global growth projection of 3.3% for both 2025 and 2026, which remains below the historical average of 3.7% from 2000–2019. While the US has seen an upward revision in growth forecasts, other major economies face downward adjustments due to elevated policy uncertainty. Global inflation is expected to decline to 4.2% in 2025 and 3.5% in 2026, with advanced economies likely to reach inflation targets sooner than emerging markets.

Insurance Industry Developments

• The global insurance market began to soften in late 2024, according to a range of industry observers, reports Insurance Business, 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. 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. This may lead to lower premiums and increased market capacity – see our recent blog article.

• The cyber insurance market is projected to grow steadily in 2025, with global premiums expected to reach $16.6 billion, an 8% increase from 2024, according to Swiss Re. While the rapid double-digit growth seen in previous years has slowed, the market remains far from saturated.

• UK insurance regulator the Prudential Regulation Authority (PRA) has released its 2025 Climate Change Adaptation Report, highlighting the increasing physical and transition risks posed by climate change to insurers and financial institutions. The report outlines the PRA’s enhanced supervisory expectations, urging firms to strategically address climate risks through better identification, measurement, and management practices, improving the industry’s readiness for a net-zero transition.

• Meanwhile, the other UK insurance industry regulator, the Financial Conduct Authority (FCA), reports that key issues impacting climate change adaptation of insurers include data and modelling, barriers to insurance underwriting for climate risks, and allocating capital to adaptation measures.

Underwriting Performance

• In early 2025, Lloyd’s of London reported strong preliminary results for 2024, showcasing growth and resilience in a challenging market. Gross written premiums increased by 6.5% to £55.5 billion, driven by an 8.5% rise in property and reinsurance segments. The combined ratio, a key measure of underwriting profitability, stood at 86.9%, up from 84.0% in 2023, reflecting major claims in the second half of the year. Excluding large losses, the underlying combined ratio improved to 79.1%.

• The attritional loss ratio also improved to 47.1%, highlighting disciplined underwriting, while the expense ratio remained steady at 34.4%. Lloyd’s also addressed the California wildfires, estimating a net loss to syndicates of approximately $2.3 billion, though this is not expected to impact capital significantly.

Tech, Cyber and AI Developments

• February 2025 saw the biggest ever ‘cyber heist’ – and probably the largest single theft of all time, according to Reuters. Dubai-based cryptocurrency exchange Bybit suffered a massive security breach, resulting in the theft of digital tokens valued at around USD $1.5 billion. The North Korean state-sponsored Lazarus Group is suspected to be behind this attack.

• The growing integration of AI in the insurance sector is being met with increasing regulatory complexities in 2025, according to law firm Norton Rose Fulbright. The UK’s Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) revealed that 75% of insurers already use AI, with another 10% planning adoption within three years. Key developments include the implementation of the EU AI Act from February 2025, alongside various national regulations, presenting challenges for compliance in a heavily regulated industry.

Reinsurance Market

• The global reinsurance market in 2025 is projected to maintain stability, supported by strong operating profits, robust capitalisation, and favourable pricing trends, according to S&P research reported in Insurance Business. Reinsurers are expected to earn their cost of capital, driven by disciplined underwriting and high investment income from elevated bond yields. While property catastrophe reinsurance pricing has softened due to increased capital availability, it remains at favourable levels.

• Reinsurance challenges persist, including elevated insured losses from natural catastrophes, economic inflation, and geopolitical uncertainties. The market also sees growing demand for short-tail lines and alternative capital sources, such as catastrophe bonds, which continue to expand capacity. Despite these pressures, reinsurers enter 2025 with strong capital positions, enabling resilience against potential financial stresses.

Natural Catastrophes

• The highest-profile natural catastrophe of 2025 so far has been January’s California wildfires, which caused extensive damage, with insured losses estimated at around $30 billion and total economic impact reaching $250 billion, according to Digital Insurance. These fires highlight the increasing strain on insurers operating in climate-volatile regions, as rising claims costs and policy non-renewals become more common. Regulatory and environmental challenges, coupled with escalating construction and housing costs, are expected to impact rebuilding efforts.

• In Australia, cyclone Alfred struck Queensland in March 2025. According to Artemis, early estimates suggest insured losses could surpass AUD 1 billion, given the scale of property, auto, and commercial claims.

Geopolitical Risks

• Ongoing conflicts in Ukraine and the Middle East, along with rising geopolitical tensions, are reshaping the landscape of conflict-related risks for businesses in 2025, according to Aon. Insurers are responding by reducing geopolitical insurance capacity, increasing premiums, or withdrawing coverage altogether, leaving companies with limited options for protection. The maritime sector is particularly affected, with shipping routes being rerouted to avoid high-risk areas like the Red Sea, leading to higher operational costs and supply chain disruptions.

• According to PwC, new steep international trade tariffs between the US and several other nations are expected to have significant implications for the insurance industry. These tariffs are likely to increase costs for auto parts, construction materials, and other goods, potentially driving up the severity of auto and homeowner claims.

Looking ahead…

As we progress through 2025, Costero Brokers remains committed to supporting our clients and partners in navigating their challenges. Our expertise and insights are here to help you make informed decisions and seize opportunities in a rapidly changing market.

For more detailed analysis and resources, visit our website or contact us.

Disclaimer:

This market report was developed for reference only, and any prospective statements about possible future events or performance are based on developing factors regarding economic and business activity relevant to financial and insurance markets. Such prospective statements involve risk as actual results may differ materially from those expressed or implied due to future changes in relevant factors. We are not responsible for the accuracy of the third-party information cited herein and undertake no obligation to update any such data or prospective statements, nor do we in any way intend to provide legal, financial, or insurance advice regarding any existing or future litigation or other matter discussed or projected herein. Please seek the advice of your own professional advisors or counsel regarding your specific circumstances.

Discover why the far-reaching impacts of the latest California fires make it harder for residents and businesses to get fire insurance on their property – and how insurers, retail and wholesale brokers can adapt to meet the challenges of natural catastrophes.

The devastating wildfires that swept through the Los Angeles area in January 2025 have also left an indelible mark on the insurance market. Insurers and brokers across the U.S. and beyond are grappling with the aftermath, reassessing risk models, and adapting coverage strategies. Lloyd’s alone is expecting $2.3B in losses from the California wildfires (Source: The Times). As the sector faces mounting claims and policyholder concerns, working with a specialist like Costero Brokers can provide vital expertise for creating robust and innovative wildfire and catastrophe insurance solutions.

Facing a fire catastrophe of overwhelming scale

From January 7 to January 31, 2025, a series of 17 wildfires raged across Southern California, affecting Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura counties. The fires, driven by drought conditions and hurricane-force Santa Ana winds, scorched an area of over 57,000 acres and resulted in the tragic loss of at least 29 lives, with tens of thousands of residents and local businesses displaced. (Source: The Guardian)

The two most destructive blazes were the Palisades Fire, which engulfed vast areas of Pacific Palisades, and the Eaton Fire in Altadena, both ranking among the most damaging wildfires in California’s history. These infernos collectively destroyed over 18,000 structures, with early loss estimates reaching over USD $250 billion, making it one of the costliest disasters in U.S. history. (Source: Wikipedia)

The evolving insurance landscape for California wildfires

In recent years, California’s wildfire insurance landscape has been fraught with challenges. Following the deadly 2018 Camp Fire, which caused $12.5 billion in insured losses, insurers have steadily withdrawn from the state, citing unsustainable risks. State Farm, Allstate, and other major insurers have either stopped issuing new policies in affected areas or raised rates to account for escalating wildfire threats. (Source: ABC News)

California’s regulatory restrictions on insurance premium increases, combined with rising construction costs and climate change-driven natural catastrophes, have placed immense strain on the market. Many homeowners and businesses are now forced to rely on California’s state-run ‘last-resort’ fire insurance scheme, the FAIR Plan (Fair Access to Insurance Requirements). The FAIR Plan now carries over $450 billion in exposure—far beyond its financial capacity. (Source: Vox)

Immediate and long-term insurance impacts of the 2025 wildfires

The January 2025 wildfires have significantly reshaped the insurance and reinsurance landscape in the following ways:

1. Soaring insurance loss estimates

Initial insured loss estimates ranged between $30 billion and $45 billion, with potential increases as claims continue to be assessed. Major reinsurers are now reassessing their appetite for wildfire-exposed risks in California, which could lead to even higher reinsurance premiums and reduced capacity. (Source: Harvard Business Review)

2. California’s FAIR Plan under strain

With its coverage limits capped at $3 million per structure, the FAIR Plan is proving inadequate for homeowners in high-value areas like Pacific Palisades. As claim volumes increase, the plan may be forced to levy assessments on participating insurers, adding financial stress across the market.

3. Rising rebuild costs and payout challenges

Rebuild costs are surging due to inflation, supply chain disruptions, and skilled labour shortages. Insurers face mounting pressures to balance fair settlements with policy caps that may no longer reflect actual replacement costs. (Source: Claims Journal)

4. The role of utilities and subrogation

Investigations are ongoing into whether the regional electricity supplier’s equipment played a role in sparking the Eaton Fire. If utility liability is established, subrogation claims may allow insurers to recover some payouts, but the legal battles could take years. (Source: New York Times)

5. The Additional Living Expenses (ALE) crisis

Many displaced residents now face years of uncertainty. Given the tight housing market, Additional Living Expenses (ALE) claims are expected to rise dramatically, further exacerbating insurers’ financial exposure. (Source: InsTech Catastrophe Risk TV)

6. Insurers Raising rates and exiting the market

In direct response to wildfire losses, leading California insurer State Farm has applied to state regulators to make a 22% rate increase on California homeowners’ policies, with other insurers likely to follow suit, or exit the region altogether. These rate hikes could push more policyholders toward the FAIR Plan, intensifying the crisis. (Source: The Independent)

Finding an expert partner to navigate wildfire insurance challenges

At Costero Brokers, we understand the complexities of wildfire risk. Our expertise in catastrophe insurance and reinsurance, combined with strong relationships at Lloyd’s of London and across the global reinsurance markets, enables us to develop tailored solutions for insurers and brokers protecting residential and commercial property in catastrophe-prone regions.

We can help you create innovative insurance solutions to meet the challenges, such as:

• Parametric insurance: Providing swift, pre-agreed payouts after natural catastrophes, based on measurable triggers, like wildfire-burned acreage or hurricane wind speeds within an agreed-upon area, ultimately helping insurers and policyholders manage losses more efficiently.
• Insurance structures: Leveraging structured solutions with multiple carriers to help your clients obtain desired limits, and insurers absorb shock losses while maintaining capacity.
• Mitigation-focused products: Encouraging policyholders to adopt fire-resistant materials and preventive measures, reducing claim severity over time. Utilising private fire defence companies, such as Ember is also becoming more and more beneficial when looking to secure property coverage in fire-prone areas.
• Customised risk transfer Strategies: Tailoring coverage to balance affordability with adequate protection, ensuring long-term market sustainability.

Discuss your way forward in the insurance landscape

The 2024 Hawaii wildfires, as well as the 2025 Southern California wildfires, serve as a stark reminder of the growing natural catastrophe risks in California and beyond. As insurers and brokers navigate an evolving and increasingly volatile insurance landscape, partnering with a specialist expert is more critical than ever.

Costero Brokers is committed to helping you develop strategic property insurance and reinsurance solutions that safeguard your business and policyholders. To explore how we can help you navigate the challenges ahead, get in touch with our expert, Cordelia Powell at Costero Brokers.

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.