Q1 Automobile Summary
Overall (Challenging)
Multiple related, converging factors have been impacting market conditions. On one hand, a return to normal driving behaviors following COVID restrictions and a shortage of spare parts has been driving up losses and loss costs. While on the other hand, a shortage of semiconductors and consequential inventory shortages has led to a slow recovery in new car sales, equating to less growth opportunity for insurers. The overall impact has meant broadly sufficient capacity but a generally difficult insurance market, with elevated pricing and rigorous underwriting.
Pricing (+11-30%)
Rate increases have been significant as accident frequency has nearly returned to pre-pandemic levels, and loss costs have been high.
Capacity (Ample) Lack of new car inventory has impacted insurers’ ability to grow, therefore, insurers have been expanding their capacity to increase their market share.
Underwriting (Rigorous) Poor 2021 performance has led to greater underwriting stringency and conservatism as insurers focus on profitability.
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) Market conditions are expected to remain challenging, with rigorous underwriting and significant rate increases.
Q1 Cyber Summary
Overall (Challenging)
Market conditions have become more challenging following further loss ratio deterioration stemming from both frequency and severity of losses. Pricing and deductibles have been increasing materially, capacity has been constrained, and retentions and coinsurance requirements have been increasing significantly for ransomware.
Pricing (>+30%)
Severe rate increases have been imposed as a result of increasing loss frequency and severity.
Capacity (Constrained) Capacity was significantly constrained; facultative reinsurance was often required to complete placements.
Underwriting (Rigorous) Underwriting has been stringent and rigorous, with detailed supplemental questionnaires and loss records required.
Limits (Flat) Expiring limits were achieved in most cases.
Deductibles (Increased) Deductible increases were imposed in most cases.
Coverages (More Restrictive) Coverage restrictions – especially related to ransomware and cyber extortion – were imposed in most cases.
A Look Ahead (Challenging) As cyber risks continue to become more complex and global in nature, insurer appetite is expected to become more focused, capacity constraints are expected to continue, and coverage clarifications and exclusions are expected to continue to be mandated.
Q1 Property Summary
Overall (Moderate)
The market has been stable overall. Insurers have been deploying capacity cautiously. Proportional schemes have become more common. Underwriting scrutiny has been high, driven by reinsurance treaties. Complex risks continued to experience a challenging reinsurance market.
Pricing (Flat)
Most risks have been experiencing “as is” pricing or modest increases. Well-performing risks may have, in some cases, experienced modest discounts.
Capacity (Constrained) Satisfactory engineering reports have been a pre-requisite for insurers to increase – or even maintain – current capacity levels. Insurers have limited their capacity on a case-by-case basis.
Underwriting (Rigorous) Underwriting information has been more important than ever. Many insurers have been reluctant to provide a quote without engineering reports and a 5-year loss history.
Limits (Flat) Expiring limits were achieved in most cases. As investments were made and exposures increased, many insureds explored higher limits, but few have opted to purchase them at current pricing levels.
Deductibles (Flat) Expiring deductibles were achieved in most cases.
Coverages (Stable) Expiring coverages were achieved in most cases. Strikes, riots and civil commotion was commonly excluded.
A Look Ahead (Moderate) With strong portfolio performance, the market may become more favorable; however, rigorous underwriting is expected to continue.
Q1 Casualty/Liability Summary
Overall (Moderate)
Market conditions have varied depending on industry type. While insurers have remained conservative for risks related to oil & gas, chemicals, and auto parts, they have been more flexible on less complex risks, like local manufacturing.
Pricing (Flat)
Pricing has been flat for non-complex risks while material increases have been imposed on complex risks and/or poor performing risk types.
Capacity (Ample) Local capacity has been sufficient for most risks and, where additional capacity has been needed, it has broadly been available in the international / reinsurance market.
Underwriting (Prudent) Underwriting has been rigorous and stringent for complex risks and/or poor performing risk types but the environment has been more favorable for non-complex, lower risk types.
Limits (Flat) Expiring limits were achieved in most cases.
Deductibles (Flat) Expiring deductibles were achieved in most cases, although many insureds in difficult industries explored deductible increases to help offset rising premium costs.
Coverages (Stable) Expiring coverages were achieved in most cases.
A Look Ahead (Moderate) In general, current market conditions are expected to continue. As the effects of the pandemic continue to subside, hospitality risks may experience more challenging conditions.
Q1 Directors and Officers Summary
Overall (Moderate)
The market has been moderating, following the significant challenges of 2020 and 2021.
Pricing (+1-10%)
Price increases have decelerated, and modest increases were the norm for most risks.
Capacity (Ample) Capacity has been sufficient for most risks.
Underwriting (Prudent) Underwriters have demonstrated some flexibility, following the difficult market conditions of 2020 and 2021. While sufficient information remained important, underwriters have been more accommodating.
Limits (Flat) Expiring limits were achieved in most cases.
Deductibles (Flat) Following the deductible mandates that were imposed in recent years, expiring deductibles were achieved in Q1 in most cases.
Coverages (Stable) Expiring coverages were achieved in most cases.
A Look Ahead (Moderate) Market conditions are expected to continue to moderate as the economy returns to pre-COVID levels.
Q1 Trade Credit Summary
Overall (Moderate)
Insurer appetite has remained strong across all sectors, leading to an abundance of capacity and stable pricing.
Pricing (Flat)
Better-than-expected loss ratios have created competition which has kept pricing stable.
Capacity (Abundant) Capacity has been abundant; however, due to required escalations and special approvals, in some cases, it has taken additional time to secure increased capacity.
Underwriting (Flexible) Underwriters have demonstrated flexibility in offering a variety of solutions to meet a range of client needs, with a focus on profitable growth.
Limits (Increased) As client exposures have increased, many have sought additional limit, which has generally been available in the market.
Deductibles (Flat) Expiring deductibles were achieved in most cases.
Coverages (Stable) Expiring coverages were achieved in most cases.
A Look Ahead (Moderate) While the market is expected to remain generally stable, impacts from the geopolitical events in Eastern Europe are expected to result in client requests for limit increases, particularly for risks in the agribusiness and electronics sectors.
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