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Nothing lasts forever in insurance. As insurance pros wait for the pendulum to swing back to previous market conditions, they should adjust to the emerging shared, layered market, and lean on strong relationships. (Photo: Shutterstock)

Throughout 2021 and long into the foreseeable future, we will all exist in an insurance market which is increasingly shared and layered. As insurance prices continue to rise across the board, buyers will naturally focus on the ultimate percentage increase in the cost of their renewal. However, that aggregated figure masks big changes in the subscription-market’s approach to insurance pricing, when multiple insurers participate together to accumulate the underwriting capital necessary to protect a specific risk. Today, each risk carrier charges their own rate for their portion of the risk. 

The number of markets needed to complete large risks has already increased, reversing an earlier trend towards concentration. Over recent years, major insurers have marched towards scale. The most obvious evidence of this drive for size has been mega-mergers between carriers to create gargantuan balance sheets — think of Chubb’s combination with Ace, and Axa’s acquisition of XL following the latter’s purchase of Catlin (to name only two of many examples). 

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