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Reading time: 5 minutes

Welcome to the Pride,

Every Friday we distill 200+ insurance, legal, and corporate-risk articles into three signals your board should know about on Monday morning.

Three developments caught our attention this week:

1. The insurance market is softening, but not evenly. This edition shows which lines are seeing real relief, and which ones aren’t
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2. Some carriers are settling claims in minutes using AI. Others are still taking weeks. We break down what that means for service, pricing, and how to evaluate your carrier’s tech maturity.
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3. Berkley just released a sweeping AI exclusion for its directors and officers liability policies. We explain what it excludes, why it matters, and what leaders should be aware of for their next renewal. Will more follow suit?

The insurance market is changing, but not in the way many boards are planning for.

The Market Is Softening

Summary:
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For the first time in years, the commercial insurance market is showing meaningful signs of softening. Premium increases across all account sizes averaged just 4.2% this quarter—a notable drop from 5.4% in Q4 and the lowest since 2021. Medium-sized accounts saw the steepest deceleration, with average hikes falling to 3.7% (down from 6.4%). Carriers are re-engaging with this segment, offering more underwriting flexibility and competitive renewal terms.

The trend extended across key lines:

• Cyber: ↓ 2.1%
• D&O: ↓ 1.6%
• Workers Comp: ↓ 2.6%
• Commercial Property: now just ↑ 2.9%, down from 6.0%
• Commercial Auto & Umbrella: still up at ↑ 10.4% and ↑ 9.5%, driven by third-party litigation funding and nuclear verdicts.

Notably, respondents flagged litigation financing as a systemic force—both raising claims severity and reducing coverage availability across auto, umbrella, and product liability lines.

So What?

This is the first real buyer’s market in nearly eight years, but it’s not a blanket softening. While middle-market programs, public company D&O, and cyber buyers may benefit from increased capacity and falling rates, casualty-heavy accounts face rising pressure. If you’re not separating your renewal strategy by line, market dynamic, and loss posture, you’re already behind.

Now is the time to:

• Push for structural enhancements where the market is loosening
• Reprice programs where underwriters are competing again
• Shore up coverage in casualty and auto while capacity is still available
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Don’t just take a discount. Build leverage.
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​Source: CIAB Commercial Property/Casualty Market Index, Q1 2025​

The Algorithm Wars: Carriers That Settle in Minutes Will Dominate the Next Decade

Summary

AI deployment in claims has crossed the Rubicon.

Major carriers shifted from pilots to production in early 2025. The numbers tell the story: generative AI alone represents a $100+ billion opportunity through 20-25% reductions in loss adjustment expenses. Claims leakage could drop 30-50% (source).

The transformation is already visible.

Allstate uses OpenAI GPT models to draft "nearly all of its claims-related emails" (source). Westfield's medical record summarization tool exceeded pilot expectations and is scaling enterprise-wide (source). Lemonade processes over 50% of pet claims instantly through AI (source).

Infrastructure providers are embedding AI directly into core systems. Insurity earned Everest Group's leadership recognition for automation across the claims lifecycle (source). Guidewire's CLARA Analytics integration saved one carrier "millions of dollars" through predictive analytics (source).

So What

AI adoption creates competitive moats measured in years, not quarters.

The capability gap is widening exponentially. AI-powered photo estimation delivers damage assessments in seconds. Traditional adjusters take days. Meanwhile, CLARA Analytics flags fraudulent claims within 14 days that human investigators might never catch (source).

When one carrier settles in minutes while another takes weeks, that's market share shifting.

Institutions can no longer evaluate carriers solely on financial strength and pricing. Technology capability directly impacts service delivery. For claims-sensitive lines, carrier selection without technology assessment risks partnering with tomorrow's obsolete providers.

The LION POV

Here's how we're advising clients:

Make AI maturity a primary selection criterion. We're developing scorecards that evaluate automation breadth, implementation depth, and technology roadmaps alongside traditional metrics.
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​The (not too distant) Future State…

In negotiations, we should be pushing for "digital-first" service standards. Manuscript language that guarantees automated processing for defined claim types. Maximum response times for AI-assisted decisions. Required transparency provisions for systematic determinations.

Request live demonstrations of carriers' claims platforms before committing.

Seeing the technology in action reveals more than any RFP response. Watch how they handle document intake. Test their photo estimation capabilities. Evaluate their fraud detection interfaces. The sophistication—or lack thereof—becomes immediately apparent.

For claims-sensitive lines, steer toward carriers demonstrating meaningful AI investment. Their improved economics often translate to more competitive pricing and superior service. Conversely, carriers clinging to legacy processes increasingly serve as residual markets at premium prices.

The technology leaders offer better value because their fundamentals support it.

Those clinging to legacy processes? They'll either exit the market or serve as residual capacity at premium prices.

The Silicon Curtain: Carriers Embrace the Technology, Exclude the Risk

Summary

Berkley drew a line in the sand.

Their new "Absolute" AI exclusion eliminates coverage for any claim "based upon, arising out of, or attributable to any actual or alleged use, deployment, or development of Artificial Intelligence". The scope is breathtaking. AI-generated content, inadequate AI governance, products incorporating AI—all excluded.

Most concerning? Corporate "statements, disclosures, or representations concerning or relating to Artificial Intelligence" face exclusion (source).

The definition creates its own problems.

AI is characterized as "any machine-based system that infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions.” That could encompass everything from Excel formulas to advanced neural networks.

Early market intelligence suggests other carriers are drafting similar exclusions, though approaches vary.

So What

This matters because Berkley's exclusion may catalyze an industry-wide coverage retreat.

The timing couldn't be worse. AI integration accelerates across financial services while coverage evaporates. Securities litigation over AI disclosures? Excluded. Customer disputes regarding algorithmic decisions? No coverage. Regulatory investigations into AI practices? Outside protection.

For boards overseeing digital transformation, every AI discussion becomes a potential coverage gap.

The contradiction is striking. Carriers deploy AI to revolutionize their operations while excluding clients' AI risks entirely. Financial institutions face an impossible choice: slow AI adoption and lose competitive ground, or proceed with potentially uninsured exposures.

Definitional ambiguity compounds the challenge. Claims handlers could theoretically invoke the exclusion for any technology-touching loss. While dedicated AI insurance products from Google, Munich Re, and Armilla offer alternatives, capacity remains limited.

The Bottom Line

The insurance market appears to be segmenting along multiple dimensions.

Pricing divergence between casualty and professional lines reflects different underlying risk dynamics. Technology adoption varies significantly across carriers, potentially affecting service delivery and competitive positioning, with some carriers excluding risks associated with AI.

If you’re a director or officer at an FI, your personal assets face threats from multiple directions…

That's why we created the D&O Contract Vigilance Blueprint, a 5-day email course designed to help you:

• Secure superior D&O insurance coverage and identify overlooked gaps.
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• Protect your personal and institutional assets by proactively addressing emerging risks.

​>>> Get the D&O Contract Vigilance Blueprint​

Don't wait until a catastrophic claim hits to find out your institution is under-protected.

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Stay Covered,

Natasha & Mark
​Co-Founders and Managing Partners
LION Specialty
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