Q1 Automobile Summary
Overall (Moderate)
As COVID restrictions have now been fully lifted, exposures have returned to normal levels. While market conditions remained modestly favorable in Q1, insurers cautiously watched for changes in portfolio performance.
Pricing (Flat)
Expiring pricing was achieved in most cases.
Capacity (Constrained) Overall market capacity has contracted following the exit of some insurers from this space. While capacity remained sufficient for private cars and small fleets, large fleets and out-of-appetite risks experienced constrained capacity.
Underwriting (Prudent) Insurers continuing to write this coverage remained cautious but growth focused, which was apparent in their underwriting behaviors and practices.
Limits (Flat) Expiring limits were achieved in most cases.
Deductibles (Flat) Expiring deductibles were achieved in most cases; however, some insureds explored deductible options as a mechanism for reducing premiums.
Coverages (Stable) Expiring coverages were achieved in most cases.
A Look Ahead (Moderate) Current market conditions are expected to continue, although insurers will continue to monitor performance and modify pricing, underwriting and coverage terms accordingly.
Q1 Cyber Summary
Overall (Challenging)
Market conditions remained challenging, with insurers providing less capacity at significantly higher pricing in parallel with more rigorous underwriting.
Pricing (>+30%)
Significant price increases continued across-the-board.
Capacity (Constrained) Insurers reduced capacity in all segments. Appetite differed widely from insurer-to-insurer, and some industry segments have become very difficult to insurer.
Underwriting (Rigorous) Underwriting rigor continued to strengthen, and underwriters demonstrated a strong reluctance to release quotes without complete underwriting information.
Limits (Decreased) High-limit placements were generally unavailable as insurers deployed capacity management strategies.
Deductibles (Increased) As deductibles continued to climb, Cyber coverage – and especially, Ransomware coverage – was often viewed as balance sheet protection; i.e., applicable to major losses only.
Coverages (More Restrictive) Ransomware restrictions continued. In addition, insurers imposed restrictions or exclusions for known vulnerabilities, widespread events and end-of-life products.
A Look Ahead (Challenging) Current market conditions are expected to continue bar an increase in capacity, which would likely serve to somewhat temper the challenging environment.
Q1 Property Summary
Overall (Challenging)
Market conditions continued to stabilize, although more difficult risk types such as food, feed, waste and chemicals remained challenged.
Pricing (+1-10%)
Single-digit rate increases could be achieved in most cases; however, distressed risks, and risks in poor performing industries, continued to experience significant increases.
Capacity (Ample) New capacity has mobilized – through new markets and appetite expansion – and insurers have targeted it toward well-performing risks.
Underwriting (Prudent) Detailed risk information was more important than ever. System-driven underwriting protocols limited available options for some risks.
Limits (Flat) Expiring limits were achieved in most cases; however, Natural Catastrophe limits were under pressure.
Deductibles (Flat) Expiring deductibles were achieved in most cases; however, distressed risks experienced deductible increase mandates.
Coverages (Stable) Expiring coverages were achieved in most cases; however, underwriters reviewed coverages and proposed changes on a case-by-case basis. Valuation / average clauses / under-insurance related topics were scrutinized.
A Look Ahead (Moderate) As technical results continue to improve, the market is expected to further moderate.
Q1 Casualty/Liability Summary
Overall (Challenging)
Market conditions remained challenging, with capacity constraints across both primary and excess layers, continued rate increases, extensive underwriting information requirements, and common referral underwriting, which has resulted in delays in the process. Fossil fuel risk has come under scrutiny, as have coverages related to Pure Financial Loss, Removal and Installation Costs, PFAS / Environmental Risks, and Recall.
Pricing (+1-10%)
Price increases continued, the extent of which varied widely based on class of business, exposure type (especially, whether or not US exposure exists) and the broadness of integrated manuscript wordings.
Capacity (Constrained) Capacity remained constrained for most classes. New capacity has not entered this space.
Underwriting (Rigorous) Underwriting was rigorous and time-consuming. Referral underwriting was common and generally prolonged. There was limited appetite for fossil fuel risks.
Limits (Decreased) Some insurers required limit and sub-limit decreases for some poor performing coverages and risk types.
Deductibles (Increased) Insureds explored deductible options as a mechanism to help offset premium increases.
Coverages (More Restrictive) Manuscript coverage extensions remained under scrutiny.
A Look Ahead (Challenging) Market conditions are expected to become more challenging as capacity remains constrained and underwriting guidelines further tighten.
Q1 Directors and Officers Summary
Overall (Challenging)
While market conditions remained challenging, they eased somewhat, with the key exception of risks that have experienced material COVID-19 impacts.
Pricing (+1-10%)
Price increases continued, the extent of which varied largely by segment and industry.
Capacity (Ample) Capacity remained sufficient for most risks.
Underwriting (Prudent) Underwriting was sensible and conservative. Concerns related to the geopolitical events in Eastern Europe grew throughout the quarter.
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; however, there were growing concerns related to the geopolitical events in Eastern Europe.
A Look Ahead (Challenging) Current market conditions are expected to continue.
Q1 Trade Credit Summary
Overall (Moderate)
Despite higher costs of energy, transport, and raw materials, market conditions remained moderate following historically favorable claims ratios in 2021; however, there appeared to be uncertainty and emerging conservatism related to potential impacts – especially for exporting companies – of the geopolitical events in Eastern Europe.
Pricing (Flat)
Pricing early in the quarter was reflective of favorable claims ratios and low risk perception but as the quarter progressed, more conservative pricing emerged.
Capacity (Constrained) Capacity has been tightening, driven by uncertainty related to rising transport and energy costs as well as potential issues with the availability of raw materials.
Underwriting (Prudent) As uncertainty continued to increase during the quarter, underwriting has become more conservative and stringent.
Limits (Flat) Expiring limits were achieved in most cases; however, the impact of the geopolitical events in Eastern Europe led to some reductions in limits for risks in impacted countries. At the same time, favorable risk types, like pharma, were able to secure increased limits.
Deductibles (Flat) Expiring deductibles were achieved in most cases.
Coverages (Stable) Expiring coverages were achieved in most cases.
A Look Ahead (Moderate) Underwriting conservativism and a tightening of coverage for risks in some countries impacted by the geopolitical events in Eastern Europe is expected to continue.
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