2021 Excess Casualty Market Remains Firm

Following a soft market cycle characterized by marked underpricing, an excess casualty market that was hardening at the start of 2021 is now firm. Underwriters continue to look for rate increases and cut capacity as large claims climb the tower.



The excess market adjustments of last year hit most insureds hard as carriers worked to correct rate and stave off underwriting losses. Now, markets are taking a more surgical approach to underwriting – whether around certain geographies with a disproportionate share of large verdicts, or classes of business that have consistently seen the biggest losses. Auto, construction, and hotels were a few of the most difficult markets when 2021 began. Those segments have now been joined by others as the fall renewal season approaches.

SML Risks. Any client with the potential for an assault and battery or abuse claim such as churches, schools, public entities, or residential care homes will be exceptionally tough to place. Sexual Molestation Liability (SML) is very difficult to obtain, and the markets that do write the coverage are putting up much lower limits. SML exposures or any kind of assault and battery risk are simply not appealing to most carriers with single limit losses rising higher in the tower.

Agriculture. Agricultural business has also seen a major shift as many of the primary players have backed away due to increased wildfire exposure. Because there aren’t many excess markets interested in agriculture, capacity is very limited and accounts are harder to place, especially those that carry heavy auto units. Previously, the majority of agricultural accounts found a home in the admitted market, but farm programs have started to pull back on limits. Agriculture accounts looking for coverage in the excess market may have difficulty achieving previous limits and will likely see a 200% increase over expiring rates due in large part to poor CAB scores.

Construction. Construction continues to see significant capacity issues as claims tap into excess layers, translating into reduced limits offered, specifically on energy and construction accounts with heavy auto exposure. Carriers aren’t just focusing on heavy auto, but also on lighter contractor fleets comprised primarily of pickup trucks and other lighter vehicles due to big claims. Towers that were previously built in $25M layers, requiring only 3-4 carriers, now require 10-12 markets as towers are structured using much smaller layers.

New York construction has been particularly hard for at least the last 5 years, and there isn’t any light at the end of the tunnel as rates remain high and claim costs grow. Action-over claims on General Liability and Workers Compensation policies as well as the liability stemming from New York’s Scaffold Law often result in six-figure claims. Such losses have inspired excess carriers to seek attachment at $5M or higher. Any market willing to attach below $5M will continue to be very expensive, and aggregate reinstatement clauses may be needed on the primary.

Wood frame construction in the West will also be very difficult to insure going forward due to higher fire exposure as well as poor wood frame results in coastal Florida. It’s no longer a preferred form of building due to construction defect claims, severe weather damage, and fire claims causing destruction to third party properties.

Florida continues to present significant construction defect issues that will be exponentially impacted following the recent Surfside condo collapse. Carriers will be hesitant to write excess or wraps on new construction and it’s likely that more construction defect claims will pop up in other states like Texas, Arizona, and Colorado. Carriers are undertaking more due diligence and pricing higher. In addition, project- specific information is being closely scrutinized by underwriting to hone in on potential losses.

Wildfire. As the West enters into a 4th consecutive severe fire season, wildfire risks are more difficult than ever, and most excess carriers are underwriting as if any loss would be catastrophic. Utility accounts will continue to find it especially hard to achieve limits at a reasonable rate. Many ranchers are also finding that their former insurance programs are disappearing due to wildfire concerns, so those accounts are now making their way into the E&S marketplace. Any client, including those involved in construction, landscaping, or infrastructure, with any risk of sparking a wildfire, will likely find less coverage available. First time entrants into the E&S market can also expect 200%-300% increases in premium as they transition from the standard market.

Habitational & Real Estate. Habitational risk appetites continue to wane as risk purchasing groups fall out of the space. This area is still primarily driven by individual risk, and there has been no significant new market entry, making it very difficult - especially when it comes to large habitational accounts, subsidized housing, assisted living, and housing for students or the elderly. Carriers that continue writing the business are asking for more in rate and most are adding exclusions or sub-limits for sexual abuse, assault and battery, as well as habitability. Area crime scores are also a major factor impacting both pricing and terms.

Auto. It’s no secret that transportation and auto losses have gone through the roof in the trucking and contractor/fleet spaces. Excess carriers continue to take the risk of being exposed very seriously as jury awards climb the tower. Fewer and fewer markets want to participate in the lead $5M for auto. Most want to attach at $10M or above $25M. While the 2021 price and capacity adjustments haven’t been as dramatic as those of 2019 or 2020, many markets continue to see some rate increases. However, generally only those with losses will see big hikes in premium. CAB (Central Analysis Bureau) reports continue to be a vital piece of data used by underwriters to assess risks around vehicle maintenance, traffic violations, and driver expertise. Companies with poor CAB scores are still viewed as high-risk because those scores are typically a key factor in the courtroom or in claim settlement discussions.

Hotels. Small boutique hotel programs can still be put together fairly easily in 2021. However, issues such as human trafficking and violent crime have become a big concern for carriers when it comes to the hospitality sector and writing larger hotel accounts. Carriers are making sure to obtain the right rate for such exposures, and are adjusting risk levels by limiting capacity. Typically, 2 or more carriers are now needed to build $25M in limits. In addition, the number of markets needed on most deals will go up as carriers reduce capacity at renewal.

Products. Excess coverage for products remains available, but inherently tough products will always
be harder to place. There are now more restrictions around materials used in products that generate exclusions – particularly in the chemical space. High-hazard classes producing items such as sporting equipment, space heaters, children’s toys, or any type of helmet or personal protective equipment will also be difficult to insure due to reduced appetite for the exposure.

Other Risks. Refineries, the rail industry, and any product with a poor loss history will continue to be challenging for the foreseeable future. Any industry known for high-vertical exposure will find that 20 carriers may be needed to build a $100M tower. Some of this is due to skyrocketing jury awards, but for others rising costs can be attributed to a narrower marketplace. For example, when it comes to the rail industry, the market was small to begin with and a couple of big players have recently exited the space leaving a very small group willing to handle rail passenger exposures.


Many brokers are reporting increased demand for excess coverage despite higher pricing because clients are becoming more aware of the inflated claims environment. Some that previously carried $5M are now looking to obtain $10M-$20M in limits. In addition to greater demand, brokers have yet to see enough significant growth in new market availability to substantially impact capacity or prices before October and January renewals. Therefore, Bermuda and London may be needed to fill out towers as carriers seek to spread their exposure across smaller layers and numerous risks.

For the majority of accounts, limits are being split inside the first $5M - sometimes into $1M layers. Markets can be found, but fewer carriers want to play in the lead for most accounts. It’s much more difficult to find $15M in excess of $10M or $25M in excess of $5M, and the option may not exist at all for some placements. Especially if relying solely on the domestic market, it will take at least 3 carriers to get to $10M and another 4 carriers to reach $50M. Above that, no matter a carrier’s position in the tower, they most likely won’t offer more than $10M in limits. In addition, as more standard markets reduce umbrella capacity or decline to offer it at all, coverage gaps are created for specialty risks, construction, habitational, and other exposures. More unique accounts that have been insured through special programs are seeing those capabilities disappear as admitted markets that used to write excess of $5M-$10M are now putting up $1M or nothing at all.

As anticipated at the beginning of the year, excess casualty has also seen big rate increases. It started with a hard auto market as significant auto risks saw a $5M lead drop to a $2M lead for twice the premium amount of the previously held $5M. After that, the excess space began correcting more widely. Capacity started to shrink and premiums rose up to 200%. Many accounts have gone from $10M in limits for $100K in premium to $5M in limits for $200K in rate.

As markets continue to correct, agents should expect price increases at renewal, the severity of which will depend on the industry and specific risk. At this point in the year, many small and medium-size accounts have already seen the premium rise 100% or experienced a large jump in attachment points. Some of those accounts were coming out of the standard market and others were already on the E&S side, but experienced a loss. Those accounts that have been claim free or with less auto exposure may see only single digit increases. However, it’s likely that most excess policies will

still see a 5%-10% increase at renewal, while those with a large auto fleet may see a 25%-35% increase. With losses, accounts that have high auto exposure will see increases of around 50%. Instead of every policy seeing huge shifts, carriers are now drilling down into the data to examine their losses across certain segments, including agriculture or anything with a large auto fleet. Because underwriting has already raised prices across the board, they’re now looking to see where more specific adjustments are needed to safeguard profitability.


Award Amounts Increasing The average verdict for a lawsuit greater than $1M involving a truck accident has risen nearly 1,000% from 2010 to 2018, increasing from $2.3M to $22.3M.1 Large Pileup Leads to Large Award After a jack-knifed tractor trailer caused a 45 car pile-up during a Florida thunderstorm in 2018, a jury awarded an injured motorcyclist $411M in damages.2

Substandard Work Leads to Texas Size Award In 2014, a Texas jury awarded $20.8M against a Dallas-area homebuilder for performing substandard work on family home.3


As jury verdicts have soared, cases that would have settled within the primary limits several years ago, now exceed the lead excess layer and reach higher into the tower. Driven by social inflation and general anti-corporate sentiment born of the Great Recession, massive jury awards immediately burn through primary liability coverage, which usually has relatively low limits ($1M - $10M) and bleeds into the umbrella and excess liability towers. For example, Texas and Louisiana are incredibly litigious states and large claims in those areas often stretch into the excess layer. With this in mind, underwriters are often pricing with the idea that social inflation will continue to increase and impact long tail claims.

Because few losses were paid in 2020 while courtrooms were closed during the COVID-19 pandemic, it’s unclear what a wider reopening of the courts will mean for the excess space. The transportation and construction markets are booming, which would generally produce more claims in those sectors. It’s also not clear if there will be additional COVID social inflation factors that skew claim values higher. Underwriters will be watching to see if there is a rise in post-pandemic claim values that further impact pricing and capacity in 2022 and into 2023.


While the market remains firm overall, there are a few brighter spots dotting the landscape. Limited new capacity has been introduced over the course of the year. While this isn’t causing any reduction in rate, it is helping to fill voids where other carriers have cut limits. In addition, more moderation in pricing growth has been seen in the energy and environmental markets. There has also been a slight mellowing in excess trucking. While that sector’s pricing remains at an all-time high, good accounts may benefit from a few new markets, particularly those with under-250 unit fleets. Those accounts are typically buying $5M-10M in limits and more competition in the space is helping to keep pricing in line. Overall, brokers are seeing slightly more willingness to help out on medium to light risk accounts across the board, while those deemed tougher will remain hard, if not harder, than last year.


Retailers should be prepping all clients to see excess tower price increases for at least the next year. While some segments won’t be hit as hard as others – it’s still tough across the board. Agents should start reviewing exposures, loss history, and renewal expectations at mid-term to avoid surprising clients with higher prices. It’s also important to get the primary layer established at least 30 days in advance to allow plenty of time to work on the excess layers. Agents may also find that many insureds are seeking to drop limits in an effort to mitigate increased pricing, making it imperative that agents confirm contractually mandated limits as a starting point for building the program.

Because auto is such a big piece of the equation for many, agents should also make sure that policyholders have written driver safety protocols and SOPs to demonstrate a reduction in auto exposure at renewal. This doesn’t apply strictly to commercial trucking companies. It’s also applicable to middle market and smaller construction as well as oil and gas contractors because it’s an important means of demonstrating to carriers that an insured is committed to reducing losses.

As more carriers request “look-up” provisions to assess the quoted rates of the carriers above them, it’s also smart to increase underwriting involvement in the total tower. Providing each underwriter with a list of carriers included in the entire tower so that they know which carriers are on each layer, what limits are in place, and their associated costs can help prevent having to renegotiate at the last minute. While this wasn’t necessary in a softer market and can take a little more work on the front end, it’s a more efficient process overall.


The excess casualty market hasn’t gotten any easier for most policyholders over the course of the year, and there’s no relief on the horizon. It continues to be difficult to find excess capacity at prices that make sense for the insured. Underwriting has refined carrier expectations around what they think will remain profitable over the hard market, and because underwriters are busier than ever, the quality of a submission has a direct correlation to the quality of the quote. The easier it is for underwriting to get a full sense of the risk, the better the outcome. Agents that fail to bring all needed information to the table at the very start will have problems getting underwriting’s attention.

The coverage is out there – it’s just an issue of pricing and terms. Agents having any difficulty filling a tower will find that partnering with a CRC broker makes the process more manageable. CRC’s strong relationships with underwriters across a wide variety of markets sets us apart from the competition. Collaborating with a trusted, knowledgeable wholesaler skilled at working efficiently in the E&S space can make all the difference. Contact your local CRC producer to learn how we can help meet your excess casualty needs.


  • Jason Howard is a Senior Vice President located in the San Francisco, CA office where he specializes in construction, environmental, life sciences, and excess limits.
  • Ben Wright is a Senior Casualty Broker and Vice President with the Houston, Texas office where he focuses on liability placements in the energy, construction, and industrial service sectors.
  • Ron Levitt is President of CRC’s Chicago office and has over 25 years of experience placing casualty business for a wide variety of industries.
  • Craig Nettles is a Broker in the Atlanta, Georgia office, handling a large portfolio of General Liability, Casualty, and Environmental Insurance business all across the country.


  1. Rise in ‘Nuclear Verdicts’ in Lawsuits Threatens Trucking Industry, CNBC, March 24, 2021.
  2. Zoom Jury Awards $411 Million Nuclear Verdict to Injured Motorcyclist — One of the Largest Virtual Verdicts to Date, Risk & Insurance, January 4, 2021.
  3. Jury Awards $20.8M Construction Defect Verdict Against Dallas Homebuilder, The National Trial Lawyers, April 4, 2014.