Navigating Uncertainty: how the US insurance market is adapting in 2025
by Wise Stine
Introduction: a look at the year so far
What’s the one word I’ve been hearing probably more than any other over the last six months in insurance? Uncertainty. Ironically, it’s about the only consistent thing we’ve seen. Environmental catastrophes, economic instability and political factors have combined to create a backdrop of (you’ve guessed it) uncertainty in the global insurance market, with the result that the cost of insurance is going up. But how are insurers responding? What kinds of skills do they need to deal with this uncertainty? And how can it actually turn out to be a positive for insurance professionals? Let’s take a detailed look at the year so far in insurance.
The rise of social inflation
We’re at a point where the rising costs of insurance claims, due to societal shifts, legal changes and other factors, are exceeding general economic inflation. While the factors driving social inflation have existed for a while, the insurance industry has really started to feel the effects in the last couple of years.
Social inflation is impacting all areas of insurance, in the form of higher jury awards, more litigation and increased legal costs for insurers, ultimately making cases more expensive to resolve. Chubb CEO Evan Greenberg and Marsh McLennan CEO John Doyle were recently featured in the Wall Street Journal calling for urgent litigation reform – particularly for third-party funding, which has also contributed to rising insurance costs.
Complexity and catastrophe leading to costly claims
Catastrophe insurance losses like the California wildfires, unpredictable economic events like trade tariffs, and proposed litigation funding reforms are also contributing to a challenging business environment. The wildfires alone accounted for an estimated $40bn of insured losses, the highest ever insured loss from a wildfire event in what was the second costliest first half-year ever.
With some insurers in the state either not writing new policies or withdrawing completely from the market as they’re not willing to take on greater risk, the remaining insurers are facing less competition and, as a result, making the cost of premiums go up. While we could see some insurance professionals dropping into the recruitment market due to their employers exiting the state and restructuring, we are seeing demand for talent in other lines of business.
Making claims more complex and increasing the likelihood of litigation as claimants seek larger settlements, social inflation is resulting in increased demand for claims adjustors, investigators and legal professionals with strong investigative and analytical skills who can handle this increasing complexity.
Demand for specialist skills
As premiums rise, we’re seeing more demand for managing general agents (MGAs). Their specialized coverage is essential for addressing unique, complex or high-risk insurance needs that traditional insurers can’t cover. As a result, there’s an active drive from insurers to hire more people across underwriting, actuarial and claims to handle the increased demand in underwriting these policies, put together the right pricing strategies and manage the complex claims.
The casualty and liability lines markets remain difficult due to the cost of premiums, meaning it’s more expensive getting insured. The exceptions are lines of business like workers’ compensation (WC), due to a constant decline in claims; and public directors and officers (D&O) and errors and omissions (E&O), due to abundant capacity and decline in initial public offering (IPOs).
With increasing regulatory requirements on emerging risks like data and climate change, insurers are more aware than ever of the importance of risk management in these areas. They’re responding to social inflation by hiring risk managers, data scientists, consultants and casualty professionals to help identify and address emerging risks, enhancing their risk management and mitigation efforts.
More cautious in assessing risk, insurers are looking for more experienced underwriters in both excess and primary casualty professionals as insurers look for help dealing with increasing difficulty placing evolving risks and building new brokers relationships.
The increasing frequency of potentially catastrophic natural events means we’re also seeing demand in areas like habitational, energy and environmental. With some of these policies non-admitted, there’s once again a high cost of insurance.
Actuarial particularly competitive
Actuarial science is hugely important in addressing the pricing of the premium as actuaries can provide accurate and timely analysis of potential risks. As a result, the actuarial market continues to see demand for program, captive and casualty experience. In particular, there’s significant demand for professionals with experience in captive insurance, as companies look to insure the risks of their owners. As companies incorporate new technologies into the workplace, they’re also looking for technical skills like Python and R.
With a limited pool of candidates who have a niche, analytical skillset, this is an extremely competitive talent market where candidates frequently receive counter offers from insurers who recognize the difficulty of replacing them. In fact, hiring companies are so keen to bring in the right talent that they’re prepared to pay a premium for people with the exact skills they need, who can hit the ground running.
Specific requirements for both candidates and clients
It’s challenging tapping into passive candidates who are happy with their current salary, are in high demand and guaranteed to be paid well wherever they go. We know from our daily conversations with insurance professionals that flexible working is a huge priority when making a move, so catering to their employees’ individual needs is absolutely essential for hiring companies. Candidates often feel a greater sense of loyalty when their employer offers flexibility and shows an understanding for their childcare needs, lifestyle and work-life balance.
At the same time, clients are very specific in their requirements when hiring. If they're looking for talent in liability or casualty, for example, they want new hires to get up and running straight away – and won’t necessarily be willing to train them. This means that providing clear pathways for progression and accelerated development opportunities is especially important if they want to attract the best insurance professionals – particularly when many are seeking significant salary increases to change roles. While the lack of training isn’t ideal for junior actuaries, some of our clients are exploring options like graduate programs so they can organically develop junior talent.
New technologies: why uncertainty can be a good thing
Insurers are already adopting new technologies like AI and machine learning for claims processing and fraud detection, and as social inflation continues, we’ll see more and more manual tasks being automated. But while AI is replacing some roles that are easy to predict and automate, it can’t support the less predictable aspects of the insurance process, such as the impact of unpredictable human behavior and decision making – and as we’ve seen, uncertainty is very much the name of the game right now. In that way, uncertainty is a great guarantee for human occupations in insurance.
As I discussed in my blog on the role of AI in insurance – and the importance of human input, human expertise is particularly important when it comes to actuarial and complex claims jobs, where human judgement is key – and that means these roles won’t be replaced by AI anytime soon.
Conclusion: trading conditions to remain unpredictable
The rise of social inflation has been accelerated by nuclear verdicts, evolving societal attitudes, political unpredictability and a host of other factors, causing the cost of claims to rise. Much of the talent insurers have been seeking over the last year has been for the purpose of addressing social inflation and dealing with the complex claims that result.
It’s hard to predict the future in an uncertain market, but as these various converging factors persist, we can see current market conditions continuing for most of the casualty lines and beyond.
If you’d like to discuss the last six months in the insurance market, are an insurance professional looking for your next opportunity, or an organization looking to hire the right talent for your team, please contact me or get in touch with Mike Rutkowski, our US managing director.
Help us stay up to date with the market
It would be great to get your perspectives of the market right now, so if you have a few minutes to spare, please complete our workplace and salary survey. Your answers will be used to compile a comprehensive report on the US insurance recruitment market. Depending on where you work in insurance, you can take part here:
Underwriting: https://www.surveymonkey.com/r/NY8MV55
Actuarial: https://www.surveymonkey.com/r/JZ62ZDB
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