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Indian River County Board of County Commissioners Gallagher CORE3619 6 Executive Summary We are very pleased to present Indian River County BOCC with a comprehensive property and casualty insurance proposal effective May 1, 2024 — May 1, 2025. This executive summary provides a high-level overview of our renewal accomplishments and alternatives for consideration. It is broken into the following components: • Marketplace Analysis — current insurance industry conditions • Property Program Analysis • Casualty Program Renewal The Big Picture 2024 PROPERTY MARKET OUTLOOK & GALLAGHER STRATEGY Insurance Market Report — March 2024 Property: Property buyers are seeing continued increases, even after the severe constraints of the past two years. That said, creative solutions must be considered as not all renewals will be straightforward, and double-digit rate increases are set to continue. Casualty: A sensible market is emerging, with median rate increases largely stabilizing. Insurers are closely monitoring the impact of social inflation, nuclear verdicts, and rising medical costs. Against a backdrop of rising loss costs, commercial auto carriers are facing up to potential adverse prior -year reserve development. Cyber: The cyber insurance market continues to mature as claims activity has increased in frequency and severity. Hackers are leveraging Al as they wage more sophisticated and targeted attacks. Foreword While challenges within the commercial property market continue, many clients will be relieved to find a more stable property marketplace at this year's renewal, but are likely to see continued rate increases. We are not out of the woods yet and many of the challenges clients have faced in their renewals are likely to continue for the near future. Our brokers will continue to emphasize the importance of providing detailed risk submissions well ahead of renewal discussions. The casualty market is currently stable. However, there are concerning claims trends with social inflation and nuclear verdicts that all are monitoring. Within commercial auto, the rising cost of repairs and liability payouts is raising questions about the adequacy of carriers' prior year reserves, an issue that could play out in pricing and coverage trends moving forward. Cyber claims activity is picking up again, with malicious actors leveraging Al to carry out increasingly targeted and sophisticated attacks. Volatility of pricing is likely to remain a feature as the market continues to mature. CV -11 4 79