Structural Changes

Clients continue to evaluate program structure in some instances due to limited options from the market. The number of clients increasing their retention climbed throughout 2021. Clients have experienced pressure to increase waiting periods for business interruption (BI)-related coverage agreements. Some clients have opted to purchase lower aggregate limits throughout the second quarter, which may correlate with the acceleration of rate increases and its pressure on budgeting. For larger insurance programs, some limit reductions were due to lack of capacity offered by the market.

Retention Change Year-over-Year (2021)

Limit Change Year-over-Year (2021)

Key Observations

60-70% of clients renewing in Q4 2021 saw an increase in retention.
Retention increases were exponentially more common in the Middle Market segment.
Aon expects continued pressure from the market to increase retention levels.
There has been an uptick in Q4 2021 in the number of clients reducing overall limits, due to market capacity limitations or the cost of insurance increasing.

Coverage Considerations

Keep reading