Being ready as industry reactions
affect commercial clients’ cost and access to capacity
More and more, this is business by science, not gut feeling.
Quoting is increasingly tied to quantified engineering and survey evidence rather than generic class codes.
By Michael Wayne
Nearly three quarters of the way through 2025, the year has provided several blunt reminders that catastrophe risk is no longer a long-term modeling footnote. Rather, it is the central driver of underwriting, placement strategy, and client conversations.
Global insured catastrophe losses hit roughly $80 billion through the first six months of 2025. The driving culprits were severe thunderstorms and record wildfires. Not surprisingly, the industry is already reacting in ways that directly affect commercial clients’ cost and access to capacity.
Here are the top five ways that catastrophe trends are reshaping commercial coverage that you need to understand and the practical moves that will keep clients covered and renewals intact.
Carriers are abandoning high-risk footprints and placements are being fractured. This is an ongoing trend with insurers becoming increasingly selective about geography and exposures. In fire-prone areas and specific coastal corridors, national carriers have cut capacity or non-renewed blocks of business. That has pushed risk onto smaller carriers or state plans and widened coverage gaps.
For producers, the retreat forces the crafting of multi-carrier programs and preparing clients for tightened terms.
Sitting idly by isn’t an option. You need to proactively map your client’s risk geography, flag properties likely to be non-renewed, and preemptively approach regional carriers and MGAs that still write those risks. Offer staged placement plans so clients aren’t surprised when a lead carrier says “no.”
Specific exposures are seeing parametric and index solutions become the norm. Traditional indemnity markets are stressed for certain catastrophe perils and, in response, buyers are embracing parametric triggers such as wind speed, rainfall indexes, and wildfire heat flux to guarantee rapid payouts and reduce disputes over valuation.
While parametrics won’t replace indemnity, they are becoming a practical complement for business interruption and agricultural and procurement risks.
Identify clients that have short-term liquidity needs after an event (supply-chain sensitive manufacturers, hospitality, agriculture) and propose hybrid solutions like parametric seed payments plus indemnity layers to cover residual loss.
Reinsurance dynamics are altering primary pricing and available capacity. Reinsurance pricing and capital flows still influence what primary carriers can offer. Mid-2025 renewals showed a mixed picture. While there is improved capital in parts of the market, reinsurance pricing remains elevated for catastrophe-exposed lines. In short, that means higher primary rates or restricted limits for clients in exposed classes.
When you are placing large property or package programs, involve your clients in the reinsurance story. Take the time to appropriately explain how their loss history and risk controls are part of the equation that you are trying to solve together.
For large or aggregation-sensitive accounts, pursue multi-year deals or layered programs that smooth reinsurance volatility.
Loss control pays off as underwriting becomes increasingly data-driven. In the wake of more and improved catastrophe models and real-time hazard data being developed, underwriters are rewarding measurable mitigation. This includes defensible space and ember-resistant construction in wildfire areas, hardened roofing and flood vents in coastal properties, and telematics for fleets exposed to convective storms.
More and more, this is business by science, not gut feeling. Quoting is increasingly tied to quantified engineering and survey evidence rather than generic class codes.
Your proposals need to include a “loss-control menu.” When you are working with carriers, you have to show them the engineering proof points they want and the data that can help get you the lower premium that you are looking for: inspection reports, retrofit budgets, telematics dashboards, and disaster response plans. Those documents move accounts from “uninsurable” to “preferred” in the eyes of an underwriter.
Placement strategy has moved from single-sheet quoting to specific program engineering. As stated, capacity is fragmented and terms vary widely by peril. That means you must design multi-layer, multi-instrument programs that may include primary limits, regional carriers for high-risk sites, quota-share or excess layers, parametric triggers, captives for retention management, and reinsurance-friendly language to preserve coverage at the higher layers.
If you are going to stay in the business and be successful, you aren’t going to be able to do it any longer being just a salesperson. You have to become an architect. Your job now means you have to present clients program blueprints that show what pays first, who pays next, and what’s covered versus being carved out. Offer competing scenarios (single large loss, aggregated catastrophe, slow-burn catastrophe) so CFOs and CROs can see worst-case cash flow and make informed risk-financing choices.
Become an architect
We’re wrapping up Q3 now. If you haven’t already, make time now to do a catastrophe review for each exposed account. Run the scenarios. Map carriers. Finally, deliver a definitive, three-step action plan of underwriting, mitigation, and financing.
Seemingly everyday losses dominate headlines. You need to write and tell the story of your clients with practical advisory work that carriers will consider.
The author
Michael Wayne is an insurance freelance writer.
