Insurer consolidation, smart technology, and the sharingeconomy are three of the trends that will shape buyer and carrierbehavior in 2016, according to Marsh.

These trends will have far-reaching impacts on pricing, riskscrutiny, and international appetite. In its annual Top 10 List report, Marsh's U.S. CasualtyPractice analyzes the state of the casualty insurance market andidentifies key trends that are expected to shape the insurancemarketplace this year.

Here are the 10 trends that Marsh outlines:

Lowering Rates

Insurers tell Marsh that current rates barely cover their lossesafter factoring in inflation and claim development. However, theeconomic turnaround from the past few years has led to increasingexposures, which has lessened the effects of these rate decreaseswhile generating more premium.

This dynamic will continue to offset 2016's downward ratepressure on competitive lines of coverage, including workers' comp,general liability, and umbrella/excess liability, Marshpredicts.

An Awakening Auto Market

Bucking trends, the automobile liability market will likely seeincreased pricing and reduced capacity in 2016, March writes in itsreport, because combined ratios are down due to the risingfrequency and severity of auto losses.

For harder-to-place liability risks, brokers and insureds willturn to alternative markets this year. “Insureds will also need tofocus on loss-control techniques, including driver safety training,fleet maintenance, and the use of telematics through vehiclemonitoring devices,” Marsh says.

More Mergers

Coming on the heels of the ACE/Chubb and XL/Catlin mergers,other insurers will look to create synergies. Some carriers willshut down unprofitable lines or consolidate expenses to diversifycapital. Mega-mergers still are possible, and Marsh predicts thatlarger insurers will look at acquiring specialty carriers to roundout their products and services in niche areas.

The continued emergence of foreign insurers, particularly fromAsia and Europe, will play out in 2016. Marsh points to recentacquisitions by Tokio Marine and Fosun International as evidence ofappetite diversification.

An Individual Approach

Insurers will underwrite on an account basis, as opposed to aportfolio approach, this year, Marsh says, in order to targetprofitable business and better identify adequate renewal rates. Assuch, carriers will scrutinize risks more closely to ensureunderwriting profitability.

Risk will play a larger part in renewal terms, as well asincreased participation among key client personnel.

Insurers will rely on their data to drive underwritingdecisions, which may become more industry-specific. Brokers andinsureds will need to use client-specific data and exposures tobest represent their risks and differentiate themselves.

But Across Multiple Platforms

Insurers who can make underwriting decisions across multipleproducts—including primary, excess, and international—will remainahead of competition. A combined casualty approach will benefitclients, improve pricing, and prevent coverage gaps.

On-demand Economy

The sharing economy is changing the traditional definition of“employee,” which creates challenges for employers and insurers.Personal and commercial coverages will need to be reconciled asclients look to this new way of doing business.

For example, are individuals who are compensated through theon-demand economy actually employees, and are they entitled toworkers' compensation? Marsh says to expect court cases andlitigation to play out on this topic in 2016.

Liability Claims

Expect litigators to focus on new areas on behalf of claimantsthis year, including traumatic brain injury, police brutality, andpost-traumatic stress disorder.

Marsh theorizes that this is because automobile liability claimsettlements and labor law actions have been costly for insureds,and they will need to focus on other loss-mitigation techniques tominimize expenses.

Get Smart

Technology embedded in devices such as glasses, watches, vests,and hard hats will become more prevalent in workers' compensationinjury prevention. Look to these devices to also capture data thatwill be used to make changes to work sites and safety andloss-control programs.

Two-way video and other smartphone apps will be more widely usedto improve access to healthcare and medical response for remoteworkers, Marsh says.

Social Tools

Social media profiles will play an increased part in claimsinvestigations.

“While some third-party administrators already analyze socialmedia to determine the whereabouts and status of injured workers orclaimants, trolling the Web for relevant data points will increasein 2016,” Marsh writes.

Drones

This year, insurers must decide whether unmanned aerialsystems—drones—should be covered under aviation, technology, orgeneral liability policies. The use of drones will continue toclimb this year—and not only for personal use, as many businessesare using drones for applications from delivering to accessingdisaster sites.