Q1 Automobile Summary
Overall (Challenging)
Market conditions remained challenging, as government-mandated premium reductions continued to impact insurer profitability and appetite. Further government-driven premium decreases have been mandated and implemented via the new auto insurance wording and rating structure for Electric Vehicles (EV). The top few insurers have attracted a large number of clients due to their excellent claims service quality and extensive networks, but because of their rapid growth, a temporary suspension of new business has been mandated by the government.
Pricing (Down)
New pricing for Electric Vehicles has been implemented, further reducing premiums despite higher maintenance and repair costs of Electric Vehicles, and poor loss performance.
Capacity (Constrained) At current pricing levels, appetite and capacity remained constrained. Heavy risks such as taxis, mixer trucks, and dump trucks faced a very limited market.
Underwriting (Rigorous) Insurers’ preference is for low-risk / profitable risk types, which has made it difficult for some unfavorable risks to find coverage.
Limits (Increased) As the road accident compensation standard has risen, and considering the current low rate environment, there has been a growing trend amongst insureds to increase their limit. Limit increases were broadly available in the market.
Deductibles (Flat) The September 2020, insurance reforms stipulated that deductibles no longer apply to Auto coverage.
Coverages (Broader) Insureds looked to broaden their coverage at the market’s lower pricing levels. Insurers have offered coverage expansions to help maintain premium levels in the face of reduced rates.
A Look Ahead (Moderate) Conditions will continue to align with government regulation. Pricing reductions have already been implements so are expected to stabilize.
Q1 Cyber Summary
Overall (Challenging)
Market conditions were challenging due to elevated risks and losses, particularly related to ransomware.
Pricing (+11-30%)
As capacity has contracted, and losses have escalated, insurer price adjustments have continued to be imposed.
Capacity (Constrained) Virtually all insurers have implemented capacity management strategies driven partially by low pricing in China relative to most of the world.
Underwriting (Rigorous) Underwriting has been rigorous and stringent. Referral underwriting has been prevalent, especially for complex risks.
Limits (Decreased) As appetite has shifted, insurers have limited their exposure through limits reductions.
Deductibles (Increased) Increases to deductibles and waiting periods have been mandated. In some cases, insureds have explored deductible options to help offset premium increases.
Coverages (More Restrictive) Coverage restrictions have been imposed as insurers look to align with the global market.
A Look Ahead (Challenging) Current market conditions are expected to continue.
Q1 Employers Liability/Workers Compensation Summary
Overall (Moderate)
Appetite was strong and competition has increased in the mid-to-large risk space, especially for well-performing risks. Smaller and/or less favorable risks have experienced more moderate conditions.
Pricing (Flat)
Competition has been fierce for well performing, larger, lighter-hazard risks while other risks have experienced stable, flat market conditions. Robust underwriting information demonstrating positive actions and performance remained important to achieving favorable pricing.
Capacity (Ample) Driven by strong profits, insurer capacity has remained sufficient.
Underwriting (Flexible) Appetite has been strong and underwriting has been flexible, especially for mid-sized and larger risks.
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 (Moderate) Current conditions are expected to continue and may become more favorable for larger, well-performing risks as competition continues to increase in this space.
Q1 Property Summary
Overall (Moderate)
Appetite and competition has been strong for well performing, larger, lighter-hazard risks while risks needing international capacity have been experiencing more moderate market conditions.
Pricing (Flat)
Pricing has remained flat, driven largely by the 2022 treaty renewal, which was stringent. Robust underwriting information demonstrating positive actions and performance has been important to achieving favorable pricing.
Capacity (Ample) Capacity remained sufficient for attractive, loss free risks with the key exception of large risks in the semiconductor industry
Underwriting (Flexible) Appetite was strong and underwriting has been flexible, especially for loss free risks.
Limits (Flat) Limits have largely remained flat with any increases mostly in the single digit range.
Deductibles (Flat) Deductibles have remained relatively flat with the key exception of risks with adverse loss history.
Coverages (Stable) Expiring coverages were achieved in most cases; however, (silent) cyber terms and Infectious Diseases clauses have been scrutinized.
A Look Ahead (Moderate) Current market conditions are expected to continue but will likely be more favorable for larger, well-performing risks as competition continues to increase.
Q1 Casualty/Liability Summary
Overall (Moderate)
Market conditions remained stable, with flat pricing, sufficient capacity and flexible underwriting practices.
Pricing (Flat)
Pricing was generally flat, and decreases were achieved for favorable risk types.
Capacity (Abundant) Capacity remained at or near historically high levels.
Underwriting (Flexible) Underwriters have demonstrated flexibility on General Liability placements but have been more conservative on Products Liability, especially risks with US/Canada exposure.
Limits (Flat) Expiring limits were achieved in most cases.
Deductibles (Flat) Expiring deductibles were achieved in most cases; however, deductible increases have been required for complex or critical products.
Coverages (Stable) Expiring coverages were achieved in most cases.
A Look Ahead (Moderate) Market competition is expected to increase for small and mid-sized Products risks, leading to a modest improvement in market conditions, while complex and critical products risks are expected to experience continued challenging market conditions. The General Liability market is expected to remain stable.
Q1 Directors and Officers Summary
Overall (Challenging)
Market conditions have remained challenging for US listed companies, and appetite and capacity has been very limited. In addition, the first China Securities Class Action loss created a major impact for China domestic public listed companies making market conditions very difficult.
Pricing (>+30%)
Profitability has been extremely strained, and appetite and capacity have contracted, leading to a difficult pricing environment.
Capacity (Constrained) Insurers have reduced their capacity or withdrawn from the D&O market completely, leading to significant capacity constraints. There have been early signs that new capacity may enter the market.
Underwriting (Rigorous) Underwriting has been stringent and very selective. Centralized referral underwriting has been more prevalent than ever.
Limits (Decreased) Even as limit increases were requested by insureds for difficult risk types, insurers continued to implement limit reductions. In some cases, insureds explored limits options to help offset premium increases.
Deductibles (Increased) Modest increases have been common.
Coverages (More Restrictive) Coverage restrictions have been imposed, particularly for challenging risk types.
A Look Ahead (Challenging) Current market conditions are expected to continue, at least, until new capacity enters the market.
Q1 Trade Credit Summary
Overall (Moderate)
Overall market conditions remained stable. Insurers remained cautious and conservative. There has been some increased appetite for domestic business beginning in early 2022.
Pricing (Flat)
Pricing competition was common on large and/or well-performing risks, and remained stable overall.
Capacity (Ample) Capacity was generally sufficient. Insurers have not been implementing broad mandates but have instead chosen to offer capacity based on the merits of each placement.
Underwriting (Flexible) Underwriting guidelines have remained flexible and accommodating on targeted risk types. Insurer flexibility continued, even for sectors with high sensitivity, if the quality of the portfolio is demonstrated. Underwriters have continued to look carefully at risks that are still experiencing impacts from COVID, such as real estate.
Limits (Flat) Expiring limits were achieved in most cases.
Deductibles (Flat) Expiring deductibles, when applicable, were achieved in most cases.
Coverages (Stable) Coverage options have remained limited. Whole turnover policies have continued as the only option in some cases; however, single risk coverage was available in some cases. Restrictions continued on policies issued to financial institutions with domestic debt transfer.
A Look Ahead (Stable) Market conditions are expected to remain stable but are highly dependent on COVID trends which impact the economy considerably.
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