Q1 Automobile Summary
Overall (Moderate)
Rising inflation remained an issue in Argentina in Q1. Interest rates have been increasing, and challenges with imports and the lack of spare parts has further exacerbated the economic and insurance landscapes. Technical margins have been stable – and have improved in some cases – across the insurance industry, and aggressive competition has continued.
Pricing (Flat)
Despite inflationary pressures, a stable pricing environment has continued – driven by healthy market competition.
Capacity (Abundant) Local insurers were able to satisfy the capacity requirements of most risks.
Underwriting (Flexible) As a result of favorable technical margins, underwriters have demonstrated flexibility.
Limits (Increased) Limits have been increasing, driven by inflationary pressures.
Deductibles (Increased) Deductibles have been increasing, mostly as a result of inflation.
Coverages (Stable) Expiring coverages were achieved in most cases.
A Look Ahead (Moderate) A lack of spare parts will continue to create disruptions; however, the market is expected to remain generally stable.
Q1 Cyber Summary
Overall (Moderate)
The Cyber market has been developing in Argentina with very few insurers and limited, but growing, demand for coverage.
Pricing (+11-30%)
As the market has matured, and risk has become more complex, significant rate increases have become the norm.
Capacity (Constrained) With very few insurers active in this space, capacity remained scarce in Q1.
Underwriting (Prudent) Underwriters have been cautiously approaching this product as it has evolved in the Argentina market. Most underwriting has been conducted by central teams (not locally).
Limits (Flat) Expiring limits were achieved in most cases.
Deductibles (Increased) Deductible increases were imposed as insurers look to limit their exposure.
Coverages (More Restrictive) Coverage clarifications and exclusions, particularly related to Ransomware, were imposed.
A Look Ahead (Moderate) The market is expected to continue to mature as Cyber risk becomes better understood and the demand for Cyber coverage increases.
Q1 Employers Liability/Workers Compensation Summary
Overall (Moderate)
Smaller risks have been experiencing favorable market conditions while larger and more complex risks have been experiencing a modestly challenging environment.
Pricing (Flat)
Insurer pricing approaches have varied widely. While some insurers have sought modest rate increases, others – particularly in the mid-market space – have focused on growth and priced more aggressively.
Capacity (Abundant) Capacity has been abundant based on current demand.
Underwriting (Prudent) Technical underwriting results, especially related to COVID-19, have come under pressure. As a result, some insurers have become more cautious and less flexible.
Limits (Flat) Expiring limits were achieved in most cases.
Coverages (Stable) Coverages are dictated by law and as such have remained stable. COVID-19 related coverage, however, has been available only on a limited basis.
A Look Ahead (Moderate) Current moderate market conditions are expected to continue.
Q1 Trade Credit Summary
Overall (Challenging)
Market conditions have been challenging, driven by international complexities related to the geopolitical events in Eastern Europe and associated sanctions, rising commodity prices, and high inflation rates in the US and parts of Europe. In-country, Argentina has been negotiating an agreement with the IMF around inflation and currency valuation. The success of the negotiation may prove important for the development of the local economy in 2022, and ultimately may impact the Trade Credit insurance market, potentially leading to adjustments in pricing and underwriting.
Pricing (+1-10%)
Driven by international and local uncertainties, modest price increases have continued.
Capacity (Constrained) Capacity has been constrained due to currency valuation and high inflation.
Underwriting (Rigorous) Insurer appetite has been focused. Underwriting has been rigorous. Detailed underwriting information has been required without exception.
Limits (Increased) Credit limits have been increasing as a result of local currency valuation and the high rate of inflation (55%).
Deductibles (Flat) Expiring deductibles were achieved in most cases.
Coverages (Stable) Expiring coverage terms were achieved in most cases.
A Look Ahead (Challenging) Factors already at play such as trade sanctions, inflation and rising commodities prices will continue to influence the Trade Credit market. Price increases are expected to continue, along with rigorous underwriting.
Q1 Casualty/Liability Summary
Overall (Challenging)
The market remained challenging in Q1 as insurer underwriting practices remained stringent and rigorous, and appetite remained focused.
Pricing (+11-30%)
Rate increases have continued – especially, for poor performing risk types for which the increases have been significant.
Capacity (Ample) Capacity has been sufficient to meet demand.
Underwriting (Rigorous) Underwriting has remained stringent and rigorous.
Limits (Flat) Expiring limits were achieved in most cases.
Deductibles (Flat) Expiring deductibles were achieved in most cases.
Coverages (Stable) Expiring coverages were achieved in most cases.
A Look Ahead (Challenging) Current market trends are expected to continue – with stringent and rigorous underwriting practices coupled with price increases.
Q1 Directors and Officers Summary
Overall (Moderate)
Ongoing COVID impacts and economic challenges have continued to affect the insurance market. Risks with a low-to-moderate profile have been experiencing modest rate increases and sufficient capacity while complex and challenging risks have experienced more significant rate increases and capacity constraints.
Pricing (+1-10%)
Risks with a low-to-moderate profile (e.g., local exposure only) have been experiencing modest rate increases while complex and challenging risks (e.g., NYSE listed) have experienced more significant rate increases.
Capacity (Constrained) Capacity has been sufficient for targeted risk types; however, other risks, including large tower placements and NYSE listed risks, have been experiencing material capacity constraints.
Underwriting (Prudent) Underwriting has been cautious and conservative, especially on complex and challenging risk types.
Limits (Flat) Expiring limits were be achieved in most cases.
Deductibles (Increased) Side C deductibles have increased significantly for NYSE exposed risk while other deductibles have remained stable.
Coverages (Stable) Expiring coverages were achieved in most cases.
A Look Ahead (Moderate) Current market conditions are expected to continue, with some further reductions in capacity, increases in deductibles for heavy risks and stability for low-to-moderate risks.
Q1 Property Summary
Overall (Challenging)
Reinsurance contracts of local insurers have changed, as have risk appetites of international insurers. As a result, capacity has been severely constrained and rate increases have been material for some risk/activity types. Larger placements where capacity is sourced predominantly from the reinsurance market have been less affected.
Pricing (+1-10%)
Rate trends have varied widely based on risk/activity and construction type, with modest increases applicable to non-industrial activities, and more material increases applicable to industrial or logistic activities. Rate increases have been driven primarily by changes to the reinsurance contracts of local insurers.
Capacity (Constrained) Changes in the reinsurance market have precipitated insurer appetite shifts and capacity contractions for some risk/activity types. As international insurer appetite has shifted, international capacity has also tightened.
Underwriting (Prudent) Poor performance in this space has led to a more cautious underwriting approach for many insurers.
Limits (Flat) Despite overall capacity reductions, expiring limits were achieved in most cases; however, it was often necessary to leverage coinsurance from various insurers and reinsurers which generally comes at a higher price.
Deductibles (Flat) Expiring deductibles were achieved in most cases.
Coverages (Stable) Expiring coverage terms were achieved in most cases.
A Look Ahead (Challenging) Current market conditions are expected to continue.
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