Casualty market demands hard data insights ahead of renewals

Cautious optimism is back, but with evolving risks and market dynamics, Casualty reinsurers are seeking evidence to allow them to positively differentiate clients, Gallagher Re warns.

Key points:
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Casualty renewals are becoming more technical than ever, with reinsurers demanding hard data to support every argument. Only evidence validated through analytics and claims performance will convince markets whether it’s the right time to lean in or step back. 

This is the view of Emily Apostolides, Gallagher Re’s head of casualty for North America, who spoke to APCIA Today about the problem of old performance data not aligning with new realities, leaving underwriters searching for evidence instead of anecdotes.

“No one is going to give you the benefit of the doubt as much as they may like to,” she said. “They need to see some concrete evidence.” 

For Apostolides, the priority is arming teams with analytics to cut through uncertainty. She explained that the long tail of casualty complicated decision-making. “We had six years of market correctional actions; clients have changed their mix of business. They’ve invested heavily in analytics and in claims handling,” she said. “So, when you take the aggregate of all these actions and then use historical patterns to project future profitability, you’re mixing apples and oranges.”

With results taking five to seven years to emerge, reinsurers are making calls without a clear view. “If you’re writing business today, how do you make strategic decisions if you’re looking in the rear-view mirror and the whole landscape has changed? 

“Then add in a global pandemic where the courts were shut down, and it’s just a very murky landscape.”

Despite that, discipline has held. “We’re not seeing insurance policy limits for casualty creeping upwards,” Apostolides noted. “We’re still seeing the rate outpacing loss trend. Reinsurers are looking to grow strategically with the right clients, so there’s some cautious optimism, around casualty, where people feel, we are starting to understand a little more about what’s happened.”

 “If you’re writing business today, how do you make strategic decisions if you’re looking in the rear-view mirror?”

She added that reserve confidence was improving. “We haven’t really seen any notable adverse development in 2025, yet markets are waiting with bated breath to see how this plays out. We are more confident about it.”

Fresh capital interest may also shift dynamics, and Apostolides said they had seen “a lot of interest in sidecars from both cedants and investors” from cedents looking to explore this as an option, coupled with investors wanting to diversify their portfolios.

But the claims environment remains the main challenge: pandemic-era court closures created a backlog, yet recent loss ratios look better, with more losses being reported earlier. 

“We do think that clients have taken action, and they’ve changed their claims handling practices. We see that they may be acting more conservatively than they have in the past, learning lessons from those soft market years and trying to avoid making the same mistakes twice.”

The key, she said, was being able to prove it. “If it takes you five to seven years to really hang your hat on the improvements, but you don’t want to wait that long to take action, it’s trying to find and articulate that evidence to the market in terms of claims performance.”

That is where Gallagher Re is focusing. “Sometimes the story the data articulates for one client is different from the reality of another,” she said. “The anecdote is helpful, and it gives you a little bit of an understanding as to why we’re seeing these patterns, but you need to validate it and back it up with the numbers.”

Social inflation is another enduring factor, and Apostolides believes that for the foreseeable future, it’s “probably here to stay”. She said: “Our clients are doing a better job of getting ahead of it, rather than trying to play catch up, which is where we were through those 2014 through 2019 years.”

Looking ahead, she argued, leadership in casualty requires curiosity. “If you’ve been doing what you’ve been doing for the last several years, you’re not really getting the full picture. 

“People who are really curious and inquisitive will have to be a little bit more creative than they might have been in the past in terms of highlighting the evidence that supports a client’s story.”

As the market edges toward what could be a profitable phase, reinsurers must remain disciplined, data-driven and vigilant students of the business, because in casualty, the evidence will allow for better decision-making.

Emily Apostolides is head of casualty for North America at Gallagher Re. She can be contacted at: emily_apostolides@gallagherre.com.

For more news from the American Property Casualty Insurance Association (APCIA) click here.

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