Unfinished business dominated the first few days of 2015, while questions about the future shape of an iconic insurer closed out the year.

In between, a spate of mergers and acquisitions changed the makeup of property/casualty insurance market as rates continued to soften.

The softening was most pronounced in the commercial property sector. A relatively benign catastrophe year in North America, where no hurricane made landfall, helped push rates lower throughout the year.

Dealing with an increasingly common exposure — cyber security — demanded risk managers' attention.

Federal agencies also became more aggressive in going after perceived wrongdoers, and one of the world's largest automakers faced billions of dollars in lawsuits and fines for allegedly tampering with emissions control systems.

Terrorism backstop

The year began with a major development when Congress reauthorized the federal government's terrorism insurance backstop after letting it lapse for nearly two weeks, causing consternation in the property and workers compensation markets in particular.

The reauthorization bill also contained a provision establishing the National Association of Registered Agents & Brokers, a body charged with streamlining cross-state producer licensing. As of year-end, President Barack Obama had failed to appoint members to its board.

Mergers and acquisitions

The biggest risk management story of 2015 played out throughout the year: mergers and acquisitions that involved some of the biggest names in the industry. In one week in early summer alone, two top commercial insurers set the stage to become one as Ace Ltd. said it would acquire Chubb Corp. in a $28.3 billion deal.

Within days, brokerage Willis Group Holdings P.L.C. and consultant Towers Watson & Co. also announced they would combine, an $18 billion merger their boards approved on Dec. 11 despite the initial concern of some Towers Watson shareholders that the deal favored Willis at their expense.

Also, XL Group P.L.C. closed its acquisition of Catlin Group Ltd.; Exor S.p.A. bought reinsurer PartnerRe Ltd. after a bidding war; and Asian insurers bought North American underwriters.

Tokio Marine Holdings Inc. agreed to buy U.S. specialty property/casualty insurer HCC Insurance Holdings Inc. for $7.5 billion, the biggest M&A deal ever by a Japanese company. In addition, China's Fosun International Ltd. closed a deal to acquire U.S. insurer Ironshore Inc. for $1.8 billion.

Toronto-based Fairfax Financial Holdings Ltd. also paid $1.88 billion for Brit P.L.C., putting Fairfax among the top five Lloyd's of London underwriters.

Analysts weren't surprised by the spate of mergers.

“The reasonable price valuations, lots of available capital and inexpensive borrowing costs caused the mathematics of the deals to become earnings accretive fairly quickly,” said Mark Dwelle, an insurance analyst at RBC Capital Markets L.L.C. in Richmond, Virginia.

There was “definitely an increase in activity from the recent past,” said Jim Auden, managing director of insurance at Fitch Ratings Inc. in Chicago. With slowing organic growth, mergers are a road to growth, particularly for the price-pressured reinsurance sector.

“Japanese regulators seem to have blessed a diversification strategy, encouraging Japanese insurers to seek acquisitions overseas, including the United States,” said J. Paul Newsome, managing director at Sandler O'Neill & Partners L.P. in Chicago. “That also caused other insurers to re-examine their strategy. The Ace-Chubb merger also caused a lot of management teams to re-examine their strategies; the question was if Chubb didn't think they could do it independently, a lot of other companies had to think about whether they could do it independently.”

Still separate

One proposed acquisition went sour when Zurich Insurance Group Ltd. unexpectedly withdrew its offer to buy London-based RSA Insurance Group P.L.C. That failed deal, coupled with a sharp decline in third-quarter profit and a $275 million loss in the August explosions at the Chinese port of Tianjin, led CEO Martin Senn to resign late in the year.

At American International Group Inc., the issue was divestiture rather than acquisition.

Investor Carl Icahn called for the company to break up into three pieces — property/casualty, life and mortgage insurance — to increase shareholder value, get out of life insurance and remove AIG from the federal Financial Oversight Stability Council's list of systemically important financial institutions. The company announced in October that it would cut its senior management staff of 1,400 by 23%, with further personnel cuts likely in 2016.

Soft rates

The M&A activity came against the backdrop of falling property/ casualty rates, which was not sufficient to create a soft market but did create an ever-increasingly attractive market for buyers.

One disaster, this one manmade, did shake the industry in 2015: Massive explosions at the Port of Tianjin in China resulted in more than $1.5 billion in insured losses and rippled through insurers' bottom lines.

Top risk management developments, of course, extended beyond the insurance marketplace and its players.

Cat bonds

Catastrophe bonds, a widely used alternative to traditional reinsurance, continued to grow in 2015, with total sales of $4.5 billion through the year's third quarter.

The year's placements included Panda Re Ltd., which had $50 million of fully collateralized reinsurance against earthquake losses for sponsor China Property & Casualty Reinsurance Co. Ltd., to become the first cat bond covering Chinese perils.

Cyber breaches

An emerging exposure, cyber security, moved to the forefront. Massive data breaches at both private and public institutions led to waves of lawsuits.

Both the House and Senate approved an omnibus budget bill Friday that contained a version of the cyber security information sharing legislation and sent it to the While House for President Obama's signature.

Product liability

Overseas, Volkswagen A.G. drew the unwelcome attention of regulators and customers across the globe when it was found to have programmed software to allow autos to switch into test mode during emissions tests, then shut off and emit pollution up to 40 times the U.S. legal limit.

About 11 million cars were affected, lawsuits began to fly and the company's CEO left.

U.S. automaker General Motors Co. also faced liability issues stemming from faulty ignition switches, a problem that stretched back years.

In early December, GM said the independent fund set up to compensate victims of accidents involving faulty ignition switches awarded $594.5 million and approved 399 death and injury claims. By that time, GM's costs related to the ignition switch defects topped $2 billion, including a $900 million settlement with the U.S. Department of Justice in September, the fund said in its final report.

Regulatory enforcement

In the United States, the Securities and Exchange Commission stepped up its efforts to go after individual wrongdoers.

Late in the year, the SEC said it had 807 enforcement actions in fiscal year 2015, which ended in September, a 6.9% increase over the 755 filed in fiscal year 2014.

Employment practices

The U.S. Equal Employment Opportunity Commission also pursued a vigorous enforcement strategy, securing more than $525 million for victims of discrimination in private, state and local government and federal workplaces in fiscal year 2015, which ended Sept. 30, the agency said in a November report. The figure included $356.6 million for discrimination victims in the private sector and state and local government workplaces through mediation, conciliation and settlements. This is a 20.4% increase from the $296.1 million reported in the agency's fiscal year 2014 report.

Contractors and overtime

The U.S. Labor Department issued guidance on classifying workers as employees versus independent contractors, which experts say they expect will boost litigation against employers and ultimately result in fewer independent contractors.

In addition, the Labor Department may issue a final proposal that would change the salary at which employees are exempt from receiving overtime pay to $50,440 from $23,660 a year. Employers must pay nonexempt workers at 1.5 times their regular rate when they work more than 40 hours in a week.

Terrorism

Terrorism, however, was a concern for risk managers throughout 2015. An Islamic State-inspired attack in Paris in November left more than 130 people dead. The Paris attacks, which took place simultaneously at several locations, led risk managers to rethink travel policies. That followed terrorism attacks in Paris in January that left 17 dead. The terror threat was underscored by a December attack in San Bernardino, California, that killed 14 and wounded 21.