While the global commercial insurance marketplace has experienced significant evolution in the past few years (innovation of new products and data management, expanding capacity on almost all lines of insurance and material capital inflows), it is not without its headwinds.  Most recently, insurance claim and defense costs are at an all-time high, and other developments (notably: tariffs/supply chain constriction, catastrophic natural disasters, global outages and other industry-specific risks) have caused companies to shift operational focus and rethink how they are approaching their insurance purchasing — CRS is here to help clients in all industry sectors navigate the ever-changing landscape.

We have highlighted below the key topics driving uncertainty and impacting insurance, volatility in financial markets, social inflation relative to litigation / consumer costs and individual company financial distress.

Tariff/Trade/Supply Chain Impacts: Tariffs are driving up the cost of raw materials and increasing bonding requirements across all sectors of goods production. They are also raising replacement costs for buildings, machinery, and equipment – affecting claim settlements. In response, companies are shifting production away from high-tariff countries and adjusting operations to mitigate these costs, protect financial performance, and manage their insurance exposures. Supply chain risks remain elevated due to geopolitical tensions. Insurers now expect robust continuity and supplier diversification plans—especially for companies importing goods where tariffs add further financial pressure. In preparation for Insureds’ property, insurance renewals, it will be important to discuss with your brokers and carriers how tariffs are impacting your business.

Data/AI positives & negatives: Companies are increasingly integrating AI and automation into their portfolios, services, and business processes. However, as AI adoption expands, so do the potential dangers and risk impacts. Malicious actors may exploit vulnerabilities in AI systems to manipulate data, distort decision-making, or even wreak havoc within an organization. Moreover, AI could be leveraged to carry out highly sophisticated cyberattacks, including phishing and fraud, further complicating security measures and increasing the risk to businesses. There has been quite a bit printed and enforcement cases on the opportunities in using AI tools to increase productivity, efficiency, education etc., and coupled with the opportunities there are associated risks.  Regulatory agencies also expect to see an uptick in crime, social engineering/impersonation of people’s privacy or where companies are prone to adversarial inputs or attacks that put personal data at risk. Generative AI tools should be used with caution as without confirmed protection they can be used for expansion of fraud, money transfer, manipulation, non-consensual imagery and more.

Power Outages/Failures:  There have been several significant power outage events globally. Industries directly affected include: telecommunications, transportation/logistics, manufacturing, healthcare and other key critical infrastructures. While impacts into the insurance industry are still premature, we expect business interruption (and contingent business interruption) losses to escalate.  CRS can work with policyholders to determine the extent such interruptions and impact to businesses (as well as help navigate recover/response on insurance protections). Critical analysis will be how the “Off-Premises Service Interruption” coverage may be triggered. This coverage, often referred to as “Service Interruption” or “Off-Premises Power” coverage, is defined as coverage that provides for loss due to lack of utility services, such as power, communication, or water supply services, caused by damage from a covered peril (such as fire or windstorm) to property away from the policyholders’ insured premises-such as the utility station(s). Policyholders’ coverage for Off-Premise Service Interruption can vary, and the coverage is often sub-limited. An analysis of the coverage available under these policies will be critical in determining potential coverage.

CAT Storms: While the property market was improving in late 2024 and into early 2025, exposures in “US Cat Zones” i.e. FL, CA, and TX—Windstorm, Earthquake, Hail, Wildfire—continue to drive Property rate pressure. Deductibles need be reviewed and modeling incorporated into the underwriting process to determine the most appropriate limit of insurance to best serve the organizations’ recovery and/or rebuild.

CRS helps organizations through difficult operational and risk matters with precision, care, and conviction, we cut through complexity to deliver clarity and measurable impact. Look forward to hearing from you!