By Charles McDonagh, Class Underwriter, AEGIS London
The US Casualty market remains one of the few insurance classes that continues to harden, even as much of the global insurance landscape softens. Rates have risen consistently throughout 2025, and we expect that to continue into 2026, driven by unrelenting claims severity and a challenging legal environment. The forces that triggered the last major market correction in 2019 haven’t eased; if anything, they have intensified. This is a market defined by long-tail volatility, social inflation and legal dynamics unique to the US – and it demands a very different underwriting mindset.
What often surprises market commentators outside the US is just how starkly the casualty environment diverges from the rest of the world. While the broader international casualty market has been softening – seeing reductions of around 5% - the US market is moving in the opposite direction. One of the significant drivers behind this contrast is the US legal system. Litigation funding, social inflation and increasingly assertive jury verdicts shape a risk landscape that does not exist in other markets.
The legal pressures driving the market haven’t gone anywhere
One of the biggest challenges is the persistence of litigation funding. It is a multibillion-dollar industry that is deeply embedded in the US market. Even when individual states attempt to introduce more transparency – Georgia being the most recent example – we have to remember that US Casualty is a long-tail class. A short-term legislative tweak does not suddenly make risk more predictable. Adjusting pricing prematurely because a statute of limitations has been tweaked would be unwise.
These ongoing pressures demand a greater level of vigilance in claims evaluation. We have found great value in painstakingly working through all notifications we receive, as there is increasing uncertainty around how these notifications may develop in the future. You have to peel away the layers on each file and this is a time consuming process. But it is a fundamental part of the underwriting that makes a material difference when trying to price renewals and manage reserves appropriately.
Capacity hasn’t fundamentally shifted the market
Although we are still seeing rate rises – single and double digits throughout 2025 and likely into 2026 – the market has not seen the sort of new capacity that changes the overall dynamic. Fresh entrants are emerging, but their lines tend to be smaller and more complementary than transformative.
Our bigger concern isn’t new capital but how the legacy market has evolved. Many peers have executed reinsurance-to-close transactions, effectively resetting their exposure and allowing new underwriting teams to start again without fully living through the consequences of prior cycles. AEGIS London is one of the few that hasn’t done this. While we fully understand the appeal of tidying up old liabilities, these deals can remove the vital feedback loop that comes from seeing how risks develop over ten years or more. That feedback is where discipline, knowledge and experience is forged.
It doesn’t help that relatively few underwriters have stayed in one place long enough to see how the long tail truly unfolds. Experience matters, and in the last decade, continuity in the US market has become something of a rarity.
Why AEGIS London is built for this environment
AEGIS London’s structure gives us a distinct advantage in a class of business like US Casualty. Being owned by a mutual insurance company, our objective is firmly focused on maintaining underwriting discipline, not to chase top-line growth or satisfy quarterly targets. That means we do not feel pressure to write business we shouldn’t or to relax pricing when the market heats up.
History shows that many MGAs and syndicates entering US Casualty don’t last the course. We plan to be writing this business long into the future, just as we have for the past decade.
Looking ahead: consistency over cycles
People ask whether the US Casualty market is heading for a soft phase. In our view, this is not a class that lends itself to commoditisation or rapid cycles. The long-tail nature of claims, the unpredictability of jury awards and the scale of litigation funding all point towards a market that requires steady, disciplined underwriting – consistently, not cyclically.
The greatest risk ahead comes from within the industry. Growth pressures can tempt underwriters to relax discipline at exactly the wrong time. A common misconception is that market conditions have “improved” enough to justify easing off. Long-tail claims from a decade ago continue to surface, and the fundamental volatility of this class means we cannot afford to lose focus.
For brokers and clients, the message is clear: choose partners who will be there for you after the loss. US Casualty will always be a challenging class. But, with effective communication between all parties, it can be a rewarding one.
Ends
This article was first published in Insurance Day 16 January 2026.