Q1 Automobile Summary

Overall (Moderate)

Underwriting results were positive in 2021, creating favorable market conditions. Insurers have been seeking to expand their portfolios to fill the gap created by the expected withdrawal of capacity in Q2.

Pricing (Down)

Market pricing has been experiencing a slight downward trend, following positive 2021 underwriting results.

Capacity (Ample)

Capacity has been stable and sufficient.

Underwriting (Prudent) Insurers have been underwriting cautiously to achieve continued positive underwriting results, while at the same time, they have been demonstrating flexibility as they look to expand market share following the withdrawal of a key market from this space in Q2.

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

A Look Ahead (Moderate) Even as a major insurer withdraws from the market, conditions are expected to remain moderate to slightly soft as existing players compete for market share given the favorable underwriting results in 2021.

Q1 Cyber Summary

Overall (Challenging)

The continued growth in the frequency and severity of ransomware cases, coupled with supply chain and support vendor vulnerabilities, has led to upward pressure on pricing and capacity restrictions.

Pricing (>+30%)

Most insureds in higher risk industries or with an undesirable cybersecurity profile experienced very significant rate increases.

Capacity (Constrained) Capacity remained limited, with some insurers preferring a high attachment point or excess layer position. Insurers continued to adjust their cyber portfolio to reduce capacity to meet global directives.

Underwriting (Rigorous) Underwriting has been increasingly rigorous and referral underwriting – including review by the insurer’s Cyber Risk Engineer - has been common, leading to delays in the underwriting process. Certain cybersecurity measures/scan reports have become a pre-requisite to receiving a quote.

Limits (Decreased) Primary limits have been decreasing, the extent of which depends largely on industry type.

Deductibles (Increased) Business Interruption time deductibles have been increasing, even on excess layers.

Coverages (More Restrictive) Coverage clarifications, particularly related to Ransomware, continued to be imposed.

A Look Ahead (Challenging) Current market conditions are expected to continue, with rate increases and capacity restrictions, as insurers seek to realign and respond to cyber attacks. Underwriters will continue to evaluate organizations’ cybersecurity maturity level with minimum cyber security measures such as multi-factor authentication (MFA) determining the insurability of each risk.

Q1 Employers Liability/Workers Compensation Summary

Overall (Moderate)

The market has generally moderated as rate increases have decelerated. Appetite is broad and capacity is abundant.

Pricing (Flat)

Rates and pricing are stabilizing following the increases that were mandated by the Work Injury Compensation Act in 2020 and 2021. Risks with unfavorable claims performance experienced rate increases.

Capacity (Abundant) The market has been robust – with strong appetite and abundant capacity; however, there have been fewer options for risks with high claims frequency, as well as insureds connected to offshore risks or risks involving the handling of gases.

Underwriting (Prudent) There has been a growing trend for underwriters to require completion of proposal forms and questionnaires, especially for risks related to work on board vessels as well as offshore risks and risks involving the handling of gases.

Limits (Flat) Limits are in accordance with and stipulated by the Work Injury Compensation Act (ACT). Notwithstanding, additional coverage / limits for Employers Liability have typically been made available alongside the ACT coverage.

Coverages (Stable) Coverages are established by the Work Injury Compensation Act and, as such, have remained stable.

A Look Ahead (Moderate) Current market conditions are expected to continue. Pricing will remain focused on industry, claims experience and the amount of wages declared.

Q1 Trade Credit Summary

Overall (Moderate)

Insurers have gained confidence as COVID-19 related uncertainty has subsided. Renewals with the incumbent insurer were generally stable and competitive terms were obtained from non-incumbent insurers for well-performing, quality risks, although competing market capacity has been constrained for large risks. Transitioning risks in high-risk sectors to a new insurer has been challenging due to limited appetite and higher non-incumbent pricing. Sanctions related to the geopolitical events in Eastern Europe have limited the availability of new coverages.

Pricing (Flat)

Pricing has stabilized, although it remains higher than pre-COVID market conditions. For loss free and/or well-performing renewals, incumbent insurers have generally been prepared to offer some rate reduction.

Capacity (Ample) Capacity remained stable, except for sectors that were impacted by the pandemic or high-risk sectors, although there has been some expectation that risk impacts from geopolitical events in Eastern Europe may affect this.

Underwriting (Prudent) Insurers remained cautious and selective whilst demonstrating flexibility.

Limits (Flat) Limits were stable, and some well-performing risks achieved increases. Limits potentially relating to sanctions stemming from the geopolitical events in Eastern Europe have been removed.

Deductibles (Flat) Deductibles were generally stable, with the exception of poor-performing risks, where deductible increases have been mandated.

Coverages (Stable) As insurer confidence has increased, coverage improvements were achieved, primarily for well-balanced portfolios with a good loss history (excluding risks related to the geopolitical events in Eastern Europe).

A Look Ahead (Moderate) The geopolitical events in Eastern Europe are expected to continue to impact the economy, potentially raising financing and commodities costs and further disrupting supply chains. This is likely to have far-reaching insurance market impacts.