Geography Trends Q1 Asia Pacific

Hong Kong

Market Dynamics

Q1 Automobile Summary

Overall (Moderate)

Market conditions have been moderate to slightly favorable. Insurer appetite for new business has been healthy, creating competition for well-performing risks.

Pricing (Flat)

With healthy appetite and competition, most risks renewed with flat pricing while some well-performing risks experienced rate decreases.

Capacity (Ample) Despite a limited motor fleet market, capacity has generally been sufficient.

Underwriting (Prudent) Underwriters have been prudent as they remain focused on profitability.

Limits (Flat) Expiring limits were achieved in most cases.

Deductibles (Flat) Expiring deductibles were achieved in most cases. There has been a growing trend for insureds to explore deductible options to help offset rising premiums.

Coverages (Stable) Expiring coverages were achieved in most cases.

A Look Ahead (Moderate) Key actions to achieve favorable results include early engagement with underwriters to drive competition, fleet risk management, and technology initiatives.

Q1 Cyber Summary

Overall (Challenging)

Market conditions have been 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, even despite significant adjustments in 2021.

Capacity (Constrained) Capacity has continued to tighten as more insurers withdraw from this space, including for reasons related to geopolitical events in Eastern Europe.

Underwriting (Rigorous) Underwriting rigor has continued. Extensive information, especially related to proper controls, has been required.

Limits (Decreased) Limits have continued to decrease as insurers deploy capacity management strategies.

Deductibles (Increased) Following the significant deductible adjustments of 2021, the current deductible increment has moderated.

Coverages (More Restrictive) Insurer concern related to systemic risk events has remained high. In addition, instead of relying on the usual and customary sanction clause, some insurers have imposed a Russia & Belarus Exclusion on their policies (or their share of a policy) across-the-board regardless of whether the insured has presence/exposure. Negotiation of removal has been difficult in the Asia market as Asian insurers generally adhere to global mandates.

A Look Ahead (Challenging) Current market conditions are expected to continue until new capacity enters the market.

Q1 Employers Liability/Workers Compensation Summary

Overall (Moderate)

Favorable underwriting results have led to a continued insurer focus on retention and profitable growth, which has served to maintain stable pricing and coverage.

Pricing (Flat)

Pricing has generally been stable. Poor performing risks have continued to experience modest rate increases while rate reductions were achieved for some well-performing risks, especially where there was market competition.

Capacity (Abundant) Capacity has remained abundant.

Underwriting (Prudent) Underwriters remained focused on profitability and have been demonstrating a reasonable level of caution.

Limits (Flat) Limits have been stable, and in line with the compulsory statute.

Coverages (Stable) Coverage is mandated by the EC Ordinance which was not amended in Q1.

A Look Ahead (Moderate) Amidst continued COVID-19 uncertainty that is most notably impacting SME businesses, underwriting behaviors will remain conservative in this market segment. Proactive preparation and submission of detailed underwriting information are recommended to successfully navigate the current market conditions.

Q1 Trade Credit Summary

Overall (Moderate)

The market stability that began in late 2021 has continued. Appetite has expanded as insurers have focused on profitable growth. Improvements to renewal terms could be achieved.

Pricing (+1-10%)

Uncertainty has continued regarding the full impact of COVID-19 and as a result, price increases have also continued, but to a lesser extent than those imposed during the pandemic.

Capacity (Ample) Appetite for certain sectors has contracted but, in general, capacity has remained sufficient.

Underwriting (Prudent) Underwriting scrutiny has been high. Extensive, detailed information has been required prior to providing indications or quotes.

Limits (Flat) Limit acceptance has continued to improve from 2020 and 2021 while limit utilization has been closely monitored by underwriters.

Deductibles (Flat) Expiring deductibles could be achieved in most cases. Any adjustments were generally made to improve terms rather than to control exposure.

Coverages (Stable) Coverage remained stable with the exception of high-risk sectors, which have been experiencing some restrictions.

A Look Ahead (Moderate) While there is uncertainty regarding the impacts of the geopolitical events in Eastern Europe, there is general optimism regarding the credit risk market, which is expected to continue to stabilize and become more competitive.

Q1 Casualty/Liability Summary

Overall (Moderate)

Market conditions have been moderate to slightly favorable. Insurer appetite has been healthy for new business and well performing risks, creating competition for well-performing risks.

Pricing (Flat)

Pricing was generally flat; however, it has varied depending on risk nature and loss record.

Capacity (Ample) As insurer appetite was healthy – especially for new business - capacity has been sufficient.

Underwriting (Flexible) Underwriters have been differentiating by offering alternative limits, deductibles, and coverages.

Limits (Flat) Expiring limits were achieved in most cases.

Deductibles (Flat) Expiring deductibles were achieved in most cases.

Coverages (Stable) Underwriting escalation and special approval has been required for Ukraine, Russia and Belarus domiciled risks while underwriters rely on war exclusions, terrorism exclusions, cyber exclusions and sanction limitation clauses for risks domiciled elsewhere.

A Look Ahead (Moderate) Current market conditions are expected to continue, with healthy competition on well performing risks and new business.

Q1 Directors and Officers Summary

Overall (Moderate)

Market conditions have been stabilizing, especially for lower risk businesses. SPACs; however, have continued to experience challenging conditions, driven by insurer uncertainty.

Pricing (+1-10%)

Rate increases have been continuing but have decelerated. Most risks – even including US listings – experienced modest increases in Q1. Hong Kong SPACs, on the other hand, generally experienced challenging conditions similar to the market trends for US SPACs.

Capacity (Constrained) Insurers have continued to leverage capacity management strategies to limit exposure on any one risk. Capacity is notably constrained for Hong Kong SPACs.

Underwriting (Prudent) Underwriting has been cautious, especially related to SPACs.

Limits (Flat) Expiring limits were achieved in most cases.

Deductibles (Decreased) Deductible increases were imposed in many cases (e.g., for EPL cover).

Coverages (Stable) Instead of relying on the usual and customary sanction clause, some insurers have imposed a Russia & Belarus Exclusion on their policies (or their share of a policy) across-the-board regardless of whether the insured has presence/exposure. Negotiation of removal has been difficult in the Asia market as Asian insurers generally adhere to global mandates.

A Look Ahead (Moderate) Current market conditions are expected to continue.

Q1 Property Summary

Overall (Moderate)

Most local risks experienced moderate market conditions; however, conditions have been challenging for poor performing risk types and complex global risks with Natural Catastrophe exposure.

Pricing (Flat)

Pricing has generally been flat but has varied by risk performance. Favorable risks have experienced modest rate reductions while poor-performing risks have experienced rate increases.

Capacity (Constrained) Capacity has been constrained, particularly for complex, global Natural Catastrophe programs.

Underwriting (Prudent) Some growth-focused local insurers have been demonstrating flexibility and openness while international insurers have been more conservative and cautious.

Limits (Flat) Expiring deductibles were achieved in most cases, even for risks requiring Natural Catastrophe coverage.

Deductibles (Decreased) Most placements have been renewing at expiring deducible levels. Deductible decreases were achieved for some well-performing risks.

Coverages (Stable) Most insurers have withdrawn coverage for Russia, Belarus and Ukraine risks.

A Look Ahead (Moderate) Favorable underwriting results have led to a continued insurer focus on retention and profitable growth, which has served to stabilize pricing and coverage. Well-performing risks are expected to continue to enjoy a modestly favorable rate environment, softened underwriting rigor, and stable terms and conditions.

Singapore Market Dynamics

©2022 Aon plc. All rights reserved | Contact Us | Privacy Policy | Legal