Q1 Automobile Summary
Overall (Moderate)
Market conditions were moderate. Appetite appeared healthy, and insurers focused on maintaining their portfolios and winning new business, which remained somewhat challenging. Insurers were concerned in Q1 about rising inflation levels.
Pricing (Flat)
Pricing was generally flat, although inflation and its impact on the cost of auto materials and labor remained under a close watch as repairs became more expensive and took longer.
Capacity (Abundant) Local capacity was abundant, and appetite was robust for evolving risk profiles including motorcycle sharing, car sharing, and ride sharing.
Underwriting (Flexible) Underwriting guidelines and attitudes were flexible and accommodating. Negotiations were straightforward.
Limits (Flat) Expiring limits were achieved in most cases.
Coverages (Stable) Expiring coverages were achieved in most cases.
A Look Ahead (Moderate) Insurers are watching costs and emerging risks carefully, which may affect market conditions.
Q1 Cyber Summary
Overall (Challenging)
Market conditions remained challenging, with significant price increases, constrained capacity, mandatory coverage restrictions, and rigorous and rigid underwriting.
Pricing (>+30%)
Significant rate increases continued, driven by increased risk complexity and volatility, and escalating loss frequency and severity.
Capacity (Constrained) Capacity remained markedly constrained.
Underwriting (Rigorous) Underwriting was stringent and rigorous, with the extensive, detailed information required. Cybersecurity controls remained under scrutiny.
Limits (Decreased) Insurers continued to limit their per-placement capacity. In some cases, Insureds opted to reduce their limits as a cost management strategy.
Deductibles (Increased) Significant deductible increases continued to be imposed, driven by loss frequency and severity.
Coverages (More Restrictive) Coverage restrictions were imposed, especially for challenging risk types such as ransomware, business interruption, systemic risks, war, and biometrics.
A Look Ahead (Challenging) Current market conditions are expected to continue and may become more complex as underwriters consider potential underwriting and coverage changes related to the unfolding geopolitical events in Eastern Europe.
Q1 Employers Liability/Workers Compensation Summary
Overall (Moderate)
Following recent remediation efforts, the market has stabilized.
Pricing (+1-10%)
While the market has generally stabilized, modest rate increases were common in Q1 for most risks.
Capacity (Abundant) Capacity was abundant in light of demand.
Underwriting (Rigorous) Recognizing potential long-term impacts on insurers' technical results, underwriting remained rigorous and rigid.
Limits (Flat) Expiring limits were achieved in most cases.
Coverages (Stable) Coverage is statutorily determined and was stable in Q1.
A Look Ahead (Moderate) Current market conditions are expected to continue.
Q1 Trade Credit Summary
Overall (Soft)
Claims performance was favorable and as a result, there was strong competition in the market and soft pricing. Insurers have indicated concerns related to the geopolitical events in Eastern Europe, but the actual impact has been minimal.
Pricing (Down)
Favorable loss ratios have led to healthy appetite and competition, keeping downward pressure on rates.
Capacity (Ample) Capacity remained stable and sufficient, with no notable reductions.
Underwriting (Flexible) As insurers focus on growth, underwriting remained flexible and accommodating.
Limits (Increased) Limits increased as requested to accommodate growing exposures/needs.
Deductibles (Decreased) Deductibles decreased as requested by insureds.
Coverages (Broader) Broad coverages were achieved; very few restrictions were imposed.
A Look Ahead (Soft) Current market conditions are expected to continue as insurers continue to focus on growth; however, this could be impacted by potential negative financial impacts – especially related to rising energy prices - stemming from the geopolitical events in Eastern Europe.
Q1 Casualty/Liability Summary
Overall (Challenging)
The market remained challenging, with the greatest impacts experienced by automotive, pharmaceuticals and rail risks, as well as pure financial loss products.
Pricing (+1-10%)
Price increases varied widely based on technical performance, with well-performing risks often experiencing single-digit increases while challenged risks such as rail and pharma, difficult coverages such as standalone Product Recall, as well as offshore and loss-active risk types experienced increases of 10-30%.
Capacity (Constrained) Capacity tightened throughout 2021 and was materially constrained in Q1.
Underwriting (Prudent) Underwriting has become more technical and rigorous. Extensive risk information is required to achieve the requested terms.
Limits (Flat) Expiring limits were achieved in most cases; however, some reductions were imposed when underwriting details were deemed insufficient.
Deductibles (Increased) Capacity constraints have driven up pricing, and deductible increases have become a common mechanism for offsetting premium increases.
Coverages (More Restrictive) Coverage language continued to be scrutinized and clarifications and exclusions related to cyber, war, and contagious diseases have become common.
A Look Ahead (Challenging) Insurers are monitoring the geopolitical events in Eastern Europe for potential risk impacts and may further clarify coverage language as deemed necessary.
Q1 Directors and Officers Summary
Overall (Challenging)
The risk reviews of 2020 and 2021, and resultant capacity and rate adjustments, have led to more stable market conditions. Conservatism remained high in Q1; however, due to ongoing financial challenges faced by many organizations, coupled with impacts from the geopolitical events in Eastern Europe.
Pricing (+11-30%)
Previous rate increases were viewed as generally sufficient; however, some risk types – especially those experiencing ongoing financial challenges – continued to face significant price increases. Competition on high limit towers has been tempering increases.
Capacity (Constrained) While new Excess capacity has entered the market, and some existing insurers have expanded their appetite, overall capacity remained constrained, particularly for complex risks.
Underwriting (Prudent) As new capacity has entered the market, some insurers have become more flexible; however, insurers continued conducting exhaustive reviews of financial information, including COVID recovery. Additional underwriter queries related to ESG and geopolitical conflict / sanctions arose.
Limits (Flat) While additional market capacity offered the option of limits increases, few insureds opted to purchase higher limits due to current market pricing.
Deductibles (Increased) Side B and Side C deductibles – previously very low – were under pressure in Q1.
Coverages (Stable) Insolvency exclusions have become more prevalent. War exclusions are a topic of discussion for risks with a presence in sensitive territories.
A Look Ahead (Moderate) Rate is expected to further stabilize as additional capacity enters the market and creates greater competition.
Q1 Property Summary
Overall (Challenging)
The market remained challenging especially for risks in the food, waste, and chemicals sectors, as well as natural catastrophe-exposed risks, but has started to stabilize for well-performing segments.
Pricing (+1-10%)
New capacity has helped temper rate increases, especially for well-performing risks or those adjusted at recent past renewal cycles.
Capacity (Ample) Capacity was sufficient with the key exceptions of food and waste risks, as well as heavy risks such as wood, iron and steel, mining, and rolling stock.
Underwriting (Prudent) Robust, quality underwriting information was key to identifying alternatives and achieving favorable outcomes. It has become more important than ever to start the renewal process early to allow sufficient time to provide all required information.
Limits (Flat) Adjustments – especially related to Contingent Business Interruption - have been implemented in past renewal cycles. As a result, limits have stabilized.
Deductibles (Flat) While deductibles generally remained stable, deductible options were explored by insureds as a mechanism to help offset rate increases.
Coverages (Stable) Following the pandemic and cyber exclusions that were implemented in 2020 and 2021, coverage has stabilized.
A Look Ahead (Moderate) The market is expected to continue to stabilize for well-performing risk types targeted for insurer growth.
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