How does today’s underlying risk environment compare with the shift in property pricing?

RM: The underlying loss environment has not dampened. While named storms tend to dominate the headlines, a growing share of losses come from severe convective storms, hail, straight-line winds and tornadoes. These events may be less visible nationally, but they produce significant, highly concentrated losses. Beyond weather, certain industries are experiencing their own volatility. Food and beverage is one example, where we have seen a series of economic and capital losses exceeding $50 million over the last year and a half.

How are market dynamics impacting Cardinal E&S’ approach to underwriting?

RM: A softening market makes underwriting discipline even more important. We don’t let abundant capacity dictate how we view the underlying risk. On accounts with strong risk profiles and appropriate pricing and terms, we are willing to lean in and expand our capacity. Where pricing has eroded or terms no longer reflect the exposure and loss history, we are equally willing to pull back.

We believe that discipline must be paired with transparency. In a fast-moving market, our wholesale producers need to understand not just what underwriting decisions we are making, but why. Being responsive and consistent gives brokers the insight they need to navigate conversations with retailers and insureds.

While property and casualty are both navigating shifts in the broader E&S market, each is experiencing those changes differently. For casualty, evolving pricing conditions are unfolding alongside longstanding loss and litigation trends.

What has changed most in the casualty market over the past year?

Erika Palass (EP): Over the past year, and especially over the last several months, we've seen a substantial influx of casualty capacity. Some of that is capital rotating out of property, and some of it is the continued growth and evolution of managing general agencies (MGAs) and delegated underwriting platforms. That has certainly put pressure on pricing.

Beyond pricing and capacity, what are you seeing in the underlying casualty risk environment?

EP: As we navigate rate and pricing pressures, the structural challenges that have plagued the casualty market for years are still very much at play. Tort Inflation, fueled by factors such as third-party litigation financing and nuclear verdicts, continues to drive loss severity upward. The Insurance Information Institute and Casualty Actuarial Society estimates that legal system abuse accounts for $674 billion in annual costs. These costs ultimately impact businesses, communities and taxpayers. So, while capacity is expanding and pricing is under pressure, the fundamental risk environment remains largely unchanged.

Although legal system abuse remains a major headwind for the industry, we're seeing early signs of progress. Recent reforms in states such as Florida, Georgia, Louisiana, North Carolina and New York reflect a growing recognition that balanced legal reform is necessary to improve market stability, affordability, and long-term outcomes for businesses and consumers alike. For years, CNA has supported reform efforts through advocacy, expertise and industry relationships. Continued progress will require continued stakeholder engagement, thoughtful public policy solutions and coordination in the months and years ahead.