Good morning, ! It’s Wednesday. In today’s issue: offshore energy insurance rebounds to $4.6B, AI adoption divides insurance execs, and group term life is set for steady growth through 2030. First time here? Join the 40,000+ network of insurance leaders who read us every week. Subscribe here.

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Data Dive: London’s Still the Boss of Offshore Risk

When oil prices rise, insurers smile—12 to 18 months later. Offshore energy insurance premiums surged to $4.6B in 2023, tracking the rebound in deepwater drilling and rig reactivations. But there’s a catch: upstream losses (think hurricanes, blowouts, geopolitical messes) still routinely outpace premiums. 

What hasn’t changed? London still runs the show. Lloyd’s and the IUA account for 65% of the global market, writing most complex risks tied to oil rigs, wind farms, and undersea infrastructure. That said, Brazil, Mexico, and even Japan are quietly building share. The U.S.? Just 0.2% of the market. Most risk is either self-insured or handled through captives—because, of course it is. Looking ahead, the real squeeze isn’t just pricing. It’s capacity. Climate risks, bigger claims, and a tight reinsurance market mean premiums are rising—but so are headaches.

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Group Level Term Insurance: Steady Climb Ahead

The U.S. group level term insurance market is on a steady upward trajectory, with annual growth clocking in at 6.3% through 2030. What was a $7.32B market in 2024 is projected to hit $10.57B by the decade’s end, reflecting rising demand for employer-sponsored coverage.

Why it matters: As costs rise and life insurance ownership trends evolve, insurers will need to navigate pricing, underwriting, and retention strategies to keep up with shifting consumer expectations. With sustained growth in sight, expect competition in the group benefits space to heat up.

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Insurers Are All In on AI—Well, Almost

It turns out AI is less of a trend and more of a necessity in the insurance world. Goldman Sachs Asset Management’s latest survey of 359 senior insurance execs (controlling over $13T in assets) found that only 20% are steering clear of AI. Meanwhile, 29% are already on board, and another 51% are kicking the tires.

The tech is mostly being used to slash costs (73%) and improve underwriting models (39%). Translation? Insurers want to spend less and predict risk better—AI just happens to be the enabler.

With adoption this high, AI in insurance is going from nice-to-have to table stakes. If you’re in that 20% still on the sidelines, the clock is ticking.

Allianz & Friends Take Over Viridium in €3.5B Closed-Book Consolidation Play

Cinven is handing over the reins of Viridium Group, Germany’s life insurance clean-up crew,  to a heavyweight trio: Allianz, BlackRock, and Japan’s T&D Holdings. The €3.5B deal will see the platform stay independent, but with a much stronger bench (and balance sheet) behind it. T&D takes the largest stake, while Hannover Re and Generali Financial Holdings keep their existing investments.

Viridium has quietly grown into a €67B AUM powerhouse serving 3.4 million policyholders, specializing in closed-book life portfolios ,  the financial equivalent of spring cleaning… but with compound interest. Cinven exits after a decade-long run that turned Viridium from startup to market leader.

The current management stays in place, and the new owners plan to accelerate growth across fragmented European markets. In short: expect more portfolio rollups and fewer stranded policies. Deal closes in H2 2025, pending approvals.

Private equity built the machine, now global insurers and asset managers are betting it can keep printing returns at scale.

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The Fed’s Balancing Act: Rate Cuts Coming… Probably

The Fed held rates steady at 4.25%-4.5% but still sees two cuts this year—assuming the economy plays nice. Inflation remains stubborn at 2.8%, growth projections have dipped to 1.7%, and tariffs are adding more uncertainty to the mix.

In response, the Fed is slowing down its “quantitative tightening” (read: shrinking its bond portfolio), effectively injecting liquidity into the system. Markets loved it—the Dow jumped 400+ points—but Powell made it clear: if inflation stays sticky, rate cuts could get benched. Translation: The Fed is signaling cuts, but don’t bet the house just yet.

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