Moody’s has established the Moody’s Casualty Risk Intelligence Group, a working group of six founding organisations — AXA XL, Convex, Marsh, RenaissanceRe, Tokio Marine and Travelers — built to move casualty underwriting from backward-looking claims history toward forward-looking litigation intelligence. The group will contribute research and analytical perspectives to inform the future development of the global casualty market. For a broker, the announcement is not really about Moody’s. It is about the questions clients will be asked at renewal, and how soon those questions start arriving in submissions.
What Did Moody’s Actually Announce?
The group is a platform for examining how independent, science-based analysis and forward-looking risk assessment could support underwriting decisions and portfolio management. Moody’s named three proposed areas of work: improving consistency in exposure, claims and loss data; strengthening transparency across insurance portfolios; and examining new methods of analysing litigation trends. Each of those three lands on a broker’s desk as a data request a client has to answer.
The stated ambition is to give casualty the analytical rigour property got from catastrophe modelling over the past 30 years. Moody’s Casualty and Financial Lines business, which incorporates its 2024 acquisition of Praedicat, is the engine behind the effort, drawing on datasets covering company profiles, financial information, credit risk, mergers and acquisitions, directors’ and officers’ data, litigation records and cyber risk assessments. Joe Melly, Moody’s Managing Director and Head of Casualty and Financial Lines, put it plainly: “Casualty insurance is the next frontier for risk analytics.”
Why Are Underwriters Looking Forward Instead of Back?
Historical claims experience is a weakening guide when the liability itself is new. AXA XL’s Chief Risk Officer Noel Richardson named the gap directly in the launch: casualty faces significant complexity from emerging risks such as PFAS and AI liability, yet the industry relies largely on backward-looking analysis, and the data standards, litigation intelligence and forward-looking analytics are currently missing. A client with no PFAS claims history has not answered the PFAS question. Under a forward-looking model, the absence of claims is simply the absence of data.
The money at stake is large enough to rebuild the analytics around. Aon and Moody’s have separately projected that emerging liability risks could generate up to $5 billion in new annual reinsurance premiums, and their report noted that six of the 13 largest losses in the US property and casualty sector were casualty related, with deficient reserving cited as a key factor in insurer impairments. When reserving for yesterday’s liabilities is already impairing carriers, pricing tomorrow’s liabilities off yesterday’s claims stops looking conservative and starts looking blind.
What Should a Broker Ask Clients About PFAS?
The PFAS question set is about presence, history and paper — not about claims. A broker preparing a client for forward-looking casualty underwriting can ask:
- Do any current products, coatings, processes or packaging involve PFAS or fluorinated chemistry — including products made for you by a contract manufacturer?
- Did any discontinued product line, acquired company or former site ever involve them, even decades ago?
- What do your supply contracts say: who indemnifies whom if a chemical input becomes a liability?
- Have you tested soil, groundwater or discharge at any current or former location, and is that testing documented?
- Who inside the company owns the answer — environmental, legal, operations — and is it written down in one place an underwriter can read?
Latency is what makes these questions hard to answer later. PFAS exposure can sit in a product line, a site history or an acquisition long before it becomes a claim, and the records that prove what was used, where and when are easiest to assemble before anyone is asking under litigation pressure. A broker who starts the file now is building the client’s answer while it is still cheap to build.
What Should a Broker Ask Clients About AI Liability?
The AI question set is about where automated systems touch customers, decisions and other people’s data. Brokers can ask:
- Where does AI make or shape a decision about a customer, an employee, a price or a claim — including tools bought from vendors, not just built in-house?
- When an AI-assisted output is wrong, who is contractually responsible: you, the vendor, or is it silent in the contract?
- What training or input data touches personal, health or financial information, and what consents cover it?
- Is there a human review step for high-impact automated decisions, and is that step documented or informal?
- Has the board or an owner ever formally discussed AI use, and does that discussion appear in minutes an underwriter or a court could later read — the same discipline that applies to the questions a broker asks a board before a cyber or D&O placement?
AI liability will be underwritten on governance evidence, not on intentions. Marsh’s Global Casualty Leader for reinsurance, Christopher Ross, said in the launch that the advent of AI and its downstream implications will only accelerate change in the casualty market. The brokers whose client files already show where AI is used — including the quiet defaults inside ordinary office software, the subject of our look at the AI seat inside brokerage client files — will have an easier renewal conversation than the brokers discovering the exposure alongside the underwriter.
What Should a Broker Ask Clients About Large-Scale Litigation?
The litigation question set is about venue, volume and how a small claim becomes a portfolio event. Brokers can ask:
- Which states and venues do you sell, ship or operate into — including venues known for large jury awards that you reach only through distribution?
- Could a single product, practice or contract term generate many similar claims at once, rather than one claim at a time?
- What does your claims history look like on a latency basis: how long between an occurrence and a claim arriving, and is that gap lengthening?
- Are defence costs, settlement authority and insurer consent rights in your current programme actually understood by the people who would use them in the first 30 days of a suit?
- What has changed in the business — new products, new markets, acquisitions — since the claims history your pricing rests on was created?
Litigation trend analysis changes what a claims history means. The group’s mandate includes new methods of analysing litigation trends, which means underwriters will increasingly price the direction of litigation — funding, venues, award levels — alongside a client’s own record. A clean history in a deteriorating litigation environment is a weaker answer than it was five years ago, and clients deserve to hear that from their broker before they hear it in a renewal price.
What Should a Broker Do With the Answers?
Treat the answers as submission infrastructure, not as conversation. Moody’s first proposed work area is consistency in exposure, claims and loss data, which means the brokers who win under forward-looking underwriting will be the ones whose clients’ answers are recorded the same way, in the same fields, renewal after renewal. A simple, dated record for each of the three question sets — PFAS, AI, litigation — turns a vague emerging-risk discussion into evidence an underwriter can price against.
The direction of casualty pricing is now stated out loud by the market’s own data provider and six of its largest participants. Travelers’ Vice President of Enterprise Underwriting for Casualty, Don Mahoney, said the initiative will provide better visibility into casualty exposures in an ever-changing environment. Visibility is the product. Brokers who build it for their clients first will be explaining a renewal; brokers who wait will be explaining a surprise.