Happy hump day, !

This week we delve into the marine cargo insurance market, exploring its key trends and risks. With global trade volumes on the rise, this insurance sector is expanding, but it must navigate challenges like geopolitical shifts and tariff wars.

Low-code platforms are transforming the insurance industry, with 42% of insurers already adopting them to streamline processes and enhance customer experiences, while 24% are actively testing their potential for agile development and faster innovation.

The alternative capital market is thriving, with $47B in outstanding catastrophe bonds by Q4 2024, record-breaking issuance of $17B, and surging demand driven by strong returns, high premium adequacy, and growing investor and reinsurer participation.

— Insurance 150 Team

In this Issue:

• Data Dive

• Trend of the Week

• Market Movers

• Insurtech Corner

• Deal of the Week

• Macroeconomics Corner

• Interesting Articles

• Tweet of the Week

📚 Data Dive

Marine Cargo Insurance: Buoyed by Global Trade

Marine Cargo Insurance represents the lion's share of global marine insurance (56.9%) and is projected to grow from $22.1B in 2023 to $29.9B by 2032 (CAGR: ~3.4%).

This growth is propelled by surging global trade, particularly in emerging markets, alongside stricter regulations mandating cargo coverage. Key trends driving demand include inflation's impact on inventory values and risks, port congestion, and the rise of “just-in-case” inventory models, prompting insurers to innovate their offerings. Notably, Europe leads this market, contributing $8.81B in revenue (39.8%), thanks to its trade dominance and insurance legacy. With trade resilience strengthening, marine cargo insurers are navigating a sea of opportunities.

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📈 Trend Of The Week

ILS Market Rides the Wave

The alternative capital market is shattering records, with $47B in outstanding catastrophe bonds as of Q4 2024—a 34% leap since January 2023. Aon's data reveals $17B issued this year alone, with over 100 ceding entities now active, a first for the market. Strong returns from low global catastrophe losses and high premium adequacy are fueling demand.

Even as spreads tightened by 15% compared to last year, investors remain eager, bolstered by two years of strong performance. Reinsurers, too, are thriving with better sidecar terms and increased capacity. With momentum this strong, the ILS market isn’t just growing—it’s thriving like never before.

📊 Market Movers

🛡️ Insurtech Corner

The untapped market potential of low-code in insurance

The adoption of low-code platforms is gaining significant traction in the insurance industry, as shown in the data, where 42% of insurers have already integrated low-code solutions into their operations.

Low-code platforms offer an innovative, accelerated path to digital transformation by enabling rapid application development with minimal hand-coding, empowering insurers to streamline processes and enhance customer experiences. In an industry known for its reliance on legacy systems and lengthy development cycles, this shift marks a pivotal moment.

Another 24% of insurers are running proof-of-concept initiatives, underscoring a strong commitment to exploring how low-code technologies can support agile development, improve time-to-market, and reduce dependency on scarce IT resources. 

While the leading 42% demonstrate successful adoption, the 19% currently evaluating low-code solutions and the 7% considering it signals an expanding pool of potential adopters.

These companies are likely drawn by the compelling benefits, including the ability to innovate rapidly and respond to changing customer demands while managing operational costs.

The fact that only 8% of insurers have not considered low-code solutions indicates a near-universal awareness of its transformative potential within the industry.

For insurtech providers, these statistics offer a unique opportunity to target the remaining market with tailored solutions and compelling use cases. By offering expertise and support during the evaluation and implementation phases, technology partners can help insurers unlock the full potential of low-code platforms, enabling them to meet evolving consumer expectations and regulatory demands with agility and confidence.

🤝 Deal of the Week

Callagher Basset acquires Caytons Law LLP

Gallagher Bassett's acquisition of Caytons Law LLP marks a significant development in the evolving landscape of insurance claims and legal management in the UK.

By integrating Caytons' litigation expertise with the in-house capabilities of Strata Solicitors, GB now offers a strengthened portfolio of legal services tailored to meet the demands of the insurance sector. This move expands GB's capabilities in areas such as recovery and subrogation, coverage advice, and pre-and-post defence litigation, providing corporates, carriers, captives, and MGAs with an end-to-end solution for claims management. The collaboration enhances the ability of insurance providers to address growing volumes of litigation-intensive claims while maintaining efficiency and client satisfaction.

This acquisition reflects a broader trend within the insurance industry toward consolidation and integration of legal and claims management services. As claims become more complex and require greater specialization, firms are increasingly seeking partners who can navigate the entire lifecycle of a claim, from first notice of loss to final resolution. By leveraging Gallagher Bassett’s global presence and robust resources, the combined Caytons and Strata teams are positioned to deliver tailored solutions that align with evolving industry challenges. This development not only sets a benchmark for holistic claims management but also highlights the need for insurers to adapt to the dynamic nature of litigation and client expectations in today’s market.

🌎 Macroeconomics Minute

Musk’s Government Makeover: Learning from Argentina

Elon Musk has unveiled a bold new proposal to reshape U.S. government spending, centered on creating the Department of Government Efficiency (DOGE) and targeting a staggering $2 trillion in budget cuts.

Drawing inspiration from Argentina’s libertarian firebrand Javier Milei and former Central Bank chief Federico Sturzenegger, Musk’s vision champions fiscal discipline through reduced bureaucracy and market-driven reforms. The plan includes measures like welfare work requirements and Medicare payment changes, signaling potential battles with Republicans eager to push even deeper cuts.

While the idea of a cost-cutting commission is not new, history suggests that bold ambitions often falter without public support and bipartisan commitment. Economic modeling reveals that even with DOGE’s most aggressive cuts—eliminating $500 billion in programs—the economy maintains steady growth, though GDP in 2026 is projected at 2.0%, down from a baseline of 2.7%. A modest 4% improvement in the debt-to-GDP ratio underscores the potential for structural gains but also highlights the scale of the challenge.

Musk’s initiative may reflect his disruptive approach to governance, but implementing such sweeping changes comes with significant risks. Much like Argentina’s ongoing struggles, balancing fiscal discipline with economic stability is easier said than done. Whether DOGE delivers meaningful reform or ends up as political theater remains to be seen.

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📰 Interesting Articles

🐣 Tweet of the week

"Opportunities don't happen. You create them"

Chris Grosser