3 Liquidity Shocks Insurers Can’t Ignore in 2025

Good morning, ! It’s Wednesday and we’re looking at the asset allocation of insurance companies, the P&C market share by region, and AI’s application in insurance.

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DATA DIVE

Stress Testing Liquidity: Table Stakes Now

Forget theoretical risk models—liquidity stress is real. According to a new report, insurers face a perfect storm: higher interest rates driving surrender spikes, growing CAT exposures, and bloated allocations to illiquid assets. Life insurers and reinsurers are especially vulnerable when policyholder behavior turns or capital markets seize.

The response? More firms are using internal LCR-style metrics, refining Asset-Liability Management (ALM), and pressure-testing contingency funding plans. Regulators are watching too—NAIC and IAIS frameworks are raising expectations. Bottom line: liquidity isn’t a back-office issue anymore. It’s a survival skill. (Read or Listen to the Full Report)

TREND OF THE WEEK

P&C’s Global Power Map: North America Still Reigns

Property & casualty insurance remains a highly regional game—and North America still dominates the board. The latest data on global P&C market share by gross written premiums shows North America commanding a hefty 54.3% share. Western Europe trails with 20.7%, while Wider Asia holds 17.2%. The Rest of the World accounts for a modest 7.8%.

What’s behind the concentration? Mature markets in the U.S. and Canada are driving the North American lead, thanks to large commercial lines, entrenched personal insurance penetration, and sophisticated risk transfer markets. In contrast, Asia’s emerging giants are gaining ground, with rising middle classes and digital distribution boosting retail coverage. Europe, while stable, faces a mix of slower growth and pricing pressure.

Why it matters: for global insurers, asset managers, and PE firms, this map signals where capital efficiency, growth potential, and acquisition targets diverge. North America remains the profit engine, but long-term growth bets increasingly look East. (More)

MARKET MOVERS

INSURTECH CORNER

The Spreadsheet Apocalypse Is Here

In a world where submission volumes explode and capacity contracts, underwriters are stuck between urgency and inefficiency. Enter AI. As Goldman Sachs points out, 81% of insurers are banking on it to cut costs. But the real kicker? 44% are investing in AI-enhanced underwriting, automating triage and aligning risk appetite with actual market dynamics. It’s not about replacing humans—it’s about liberating them from spreadsheet drudgery and enabling them to focus on strategic risk selection and broker relationships. Welcome to the bionic age. (More)

DEAL OF THE WEEK

Deal of the Week: Brown & Brown’s $9.8B Bet on Specialty Scale

Brown & Brown has signed a deal to acquire Accession Risk Management Group—the parent company of Risk Strategies and One80 Intermediaries—for $9.825 billion, marking one of the largest insurance brokerage transactions in recent memory.

Why it matters: Accession’s dual-engine model (specialty retail + wholesale/program management) adds immediate depth and diversification to Brown & Brown’s footprint. Risk Strategies will anchor the firm’s Retail segment, while One80 becomes part of a newly created Specialty Distribution segment.

This is more than scale. It’s a structural upgrade. Brown & Brown is absorbing not just capabilities but a client portfolio and leadership bench that can punch across product lines. The move also consolidates market share in the specialty and wholesale channel—areas where distribution fragmentation has historically stifled margin leverage.

The deal is expected to close in Q3 2025, pending regulatory approval. If integration proceeds as planned, Brown & Brown could emerge as the most strategically diversified brokerage among the top five.

Bottom line: With valuations in the specialty distribution space stretching high, this move signals Brown & Brown’s intent to lead—at any price. (More)

MACROECONOMICS

Metal Markets on the Tariff Treadmill

Aluminum markets are learning a timeless lesson: tariffs cause whiplash. The latest round of U.S. tariffs sent aluminum futures soaring—then tumbling—faster than a trader’s caffeine high. Markets quickly recalibrated, but the structural impact is clear: Oxford Economics forecasts elevated prices amid a 200k metric ton supply gap in 2025. Domestic production? Still hampered. Only four U.S. smelters remain, limiting flexibility.

Meanwhile, industrial production and employment in aluminum are stuck below historical norms—productivity gains have flatlined. Steel isn’t faring much better: a 25% tariff is pushing prices higher, with U.S. production expected to shrink this year before rebounding.

Bottom line: tariffs are driving volatility, higher costs, and persistent inefficiencies. U.S. producers might grab temporary wins, but consumers are left footing the bill. Policy clarity is desperately needed—because markets don’t handle “maybe” well. (More)

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Robert Collier