Reprinted from the Marsh & McLennan Agencyblog.

The commercial property and casualty insurance industry saw alot of positive developments in 2015, along with new challenges inthe area of technology and cyber liability. Overall, the risingtide of an improving economy has also lifted Property and Casualtyboats, but uncertainties remain.

Good news on insurance premiums

In general, insurance carriers have seen healthy balance sheetsin the past few years. After a period of yearly increases in rates,the current trends suggest that carriers will hold commercialP&C insurance premiums steady or even reduce rates in somecases.

This doesn’t mean that every company will see this moderation inP&C insurance rates. Some areas with higher-risk occupationsmay still see premium increases, and employers with less favorableloss histories are more likely to see rate increases. But overall,carriers are more likely to reward companies with a history oflower claims.

Workers’ Comp — still a challenge

The trends in Workers’ Compensation insurance have not changedmuch in 2015, and claims in 2016 will continue to be costly foremployers. Employers will need to continue to work to make theworkplace as safe and healthy as possible to keep their premiumcosts in check. Many employers are looking closely at their hiringpractices to ensure they are hiring the right people for physicallydemanding jobs. And the question of whether some claims areshifting from medical insurance to workers’ comp is still aconcern.

With more and more people covered as a result of the AffordableCare Act, it’s very possible that some individuals might try totake advantage of the better deal (for the consumer) that Workers’Comp coverage provides. Companies need to have strong policies inplace to protect themselves from Worker’s Comp fraud.

Related: Workers' Comp market update: Turbulenceahead?

One recent trend in the Workers’ Comp area is beefing up acompany’s “Return to Work” policy, usually by giving injuredworkers part-time or transitional work until they’re ready to goback to their original job. This can have tremendous benefits; itenhances recovery, reduces depression and improves morale overall.A strong commitment to helping workers ease back into their jobscan pay off in many ways for an employer.

(Image: Thinkstock)

Cyber liability — not just for big businessanymore

Perhaps the number one concern among P&C industry insidersis the growth of cyber crime and other similar risks, such associal engineering. Whether a company has its network hacked or isput at risk because of an employee’s mistake, these kinds of claimscan be costly in terms of money and reputation, and can be verydifficult for a mid-size employer to manage.

Recent years have seen headlines about a customer data breach atTarget, employee information hacked from the U.S. Office ofPersonnel Management, and other data breaches. With suchhigh-profile cases, the vulnerability of data has been a majorconcern for large employers. But P&C insiders stress that it’snot just the large companies that are at risk. Midsize and smallerbusinesses are also vulnerable; in some cases they make a moreattractive target because they are less likely to have adequateresources devoted to cyber and data security. Every employer shouldbe aware of this risk and take steps to protect his or hercompany.

Related: Front lines of cyber risk: What's a company's bestdefense?

The good news for businesses is that insurance carriers aregetting a better handle on how to judge the risk around theseissues, and are beginning to adapt their insurance offerings toprovide more protection. Although the offerings can still belimited at times, carriers are catching up with technology advancesand the risk management best practices that are being adopted byemployers and proven effective. Midsize companies in particularshould be able to find more options in the area of Cyber liabilityinsurance.

Climate still a concern

The past year was relatively free of climate-related disasters,so the buzz around flooding, storm damage, and otherweather-related property claims has diminished. But it’s safe toassume that climate will continue to be a topic for discussion, anda concern for employers. Right now, the insurance carriers seem tobe satisfied that their current policies can handle threats in thenear future.

Likewise, worries about terrorism lessened in 2015, only to pickup again after the recent Paris attacks and shooting in SanBernardino, Calif. In the U.S., the extension of the Terrorism RiskInsurance Act in January 2015 ensured that there would be agovernment-guaranteed reinsurance backstop in case a majorterrorist event.

A changing relationship

The relationship between client, broker, and carrier continuesto evolve; more and more data is available — and not justavailable, but useful. New software applications are coming at adizzying pace, and many of them are designed to help businessesunderstand data that used to be relevant only to carriers andbrokers.

Because of this, a model of strategic partnerships between thedifferent parties is emerging. Brokers and carriers will need toelevate the customer experience — the days of simple transactionsare numbered. A more engaged relationship will help not only theclient but the broker and carrier as well, by providing immediatefeedback on what works — and doesn’t work — for commercial P&Cinsurance clients.

Related: These infographics tell the story of 2015 ininsurance

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