Automobile
Market conditions were challenging, as a result of rising repair costs (including parts and labor) driven by inflation as well as a transition to electric vehicle fleets, which are more expensive to repair and replace. In addition, third party liability losses rose across the portfolio, leading to some capacity restrictions. Underwriting was prudent as insurers remained focused on risk selection. Aggregate deductibles have become more common. Looking ahead, as insurers continue to prioritize profitable performance, underwriting and risk selection will be conservative, and market conditions will remain challenging.
Casualty/Liability
Market conditions remained moderate, although challenges continued for poor-performing industries such as healthcare, energy, chemicals and food/feed. Price increases continued, driven by social inflation and increasing turnover. While capacity was sufficient, insurers were cautious about how it was deployed and reluctant to offer full capacity on primary layers. For excess placements, ventilation was often required. Underwriting discussions focused on implementing exclusions related to the events in Eastern Europe, PFAS, climate change, and USA exposure. Other coverages remained generally stable; however, client requests increased for additional coverages like PFL, mantling/ dismantling, and extended products liability. Looking ahead, current market conditions are expected to continue.
Cyber
The market began to transition, especially on excess layers and for larger risks, where new capacity entered the market, bringing greater competition. Line sizes could be increased for in-appetite risks targeted for insurer growth. Significant price increases continued on Primary placements, with some exceptions for well-managed, in-appetite risks. Across both primary and excess, underwriting remained rigorous and extensive information was required. Coverages remained stable; War clauses and Systemic Risks language was mandated, with increased standardization of these wordings. Coverage for ransomware was available again. Deductible increases imposed at recent renewals were maintained. Looking ahead, As cyber resilience continues to grow, the market is expected to continue to respond favorably with market conditions continuing to moderate.
Directors and Officers
Moderate market conditions continued. While still not soft, pricing continued to become more competitive, especially on excess layers that had experienced significant adjustments in the past for which decreases could be achieved in some cases. Capacity expanded and was abundant, especially relative to the recent past. Coverages, limits and deductibles remained stable. Looking ahead, current market conditions are expected to continue.
Marine
The Cargo market remained stable and highly dependent on individual risk performance. Flat rates could be achieved in most cases, although premiums grew due to increased turnovers, driven largely by growing inflation and raw materials costs, which also served to drive up limits. Capacity was sufficient for General Cargo while Automotive and Stock risks experienced constrained capacity due to the accumulation risk. Exclusions were introduced for goods shipped to and from Russia, Ukraine and Belarus. The Hull market experienced moderate conditions as insurers experienced reinsurance mandates and inflationary impacts; however, new capacity entered the market through new and existing insurers so flat pricing could be achieved in most cases. Underwriting was technical and focused on individual risk performance. Looking ahead, the "Five Powers Exclusion Clause“ is expected to be introduced to the Cargo market and mandated in some cases by reinsurers. Inflation will continue to pressure sums insured. More competition may lead to downward rate pressure.
Professional Indemnity
Market conditions for Construction Professional Indemnity were impacted by rising inflation, increased (construction) supply costs, and pressure from reinsurers, which drove up pricing. Capacity shifted – with new insurers entering while others reduced their lines – and was tight but sufficient for most risks. Key exceptions included Single (construction) Projects where higher limits were requested as well as large, complex risks, which experienced some constraints. Detailed underwriting information was required, and the underwriting process was rigorous. Coverages, limits and deductibles remained stable in most cases. Looking ahead, current market conditions are expected to continue.
Property
Market conditions remained generally moderate, characterized by modest price increases and sufficient capacity while Natural Catastrophe and Political Violence risks experienced a challenging environment, with more significant price increases and constrained capacity. Underwriting remained disciplined and thorough, and discussions were dominated by topics such as Natural Catastrophe losses, geopolitical events, inflation and asset valuations. Insurers imposed margin clauses or values limitation clauses if values were insufficiently substantiated. Political Violence restrictions were widely imposed. Looking ahead, insurers will continue to seek to balance their growth objectives against challenging treaty renewal terms, which will likely result in a continuation of the moderate market environment.
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