Geography Trends Q2 Latin America


Market Dynamics

Q2 Automobile Summary

Overall (Moderate)

The market has become more competitive which has served to tamp down rates. At the same time, inflation has driven up costs which has served to pressure pricing upward.

Pricing (Down)

New market entrants have created market competition, requiring incumbent insurers to compete fiercely to retain their market share.

Capacity (Abundant) New market entrants have created additional market capacity, which is now abundant.

Underwriting (Flexible) As a result of favorable technical margins, underwriters have demonstrated flexibility.

Limits (Increased) Limit increases were common, driven largely by inflation.

Deductibles (Increased) Inflation has driven up deductibles; however, some insurers have leveraged deductibles as a differentiator and are amenable to renewing them at expiring levels.

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

A Look Ahead (Moderate) Increases in Argentina’s benchmark interest rate may take some pressure off of underwriting profits.

Q2 Cyber Summary

Overall (Challenging)

The Cyber market has been developing in Argentina, with very few insurers and limited (but growing) demand for coverage. ​

Pricing (+11-30%)

Significant rate increases continued in Q2 as the market continued to mature and risks grew increasingly complex.

Capacity (Constrained) With very few insurers active in this space, capacity remained scarce in Q2. ​

Underwriting (Rigorous) Underwriters have been cautiously approaching this product as it has evolved in the Argentine market. Most underwriting has been conducted by central teams, not locally.​

Limits (Decreased) Many insureds explored limits options as a mechanism to help offset premium costs.

Deductibles (Increased) Deductible increases continued to be imposed as insurers looked to limit their exposure. ​

Coverages (More Restrictive) Insurers continued to impose coverage clarifications and exclusions, with ransomware being a particular area of focus.​

A Look Ahead (Challenging) A similar pattern of development is expected as Cyber risk becomes better understood and demand for this coverage increases.​ The importance of Multi-Factor Authentication and other security measures will continue to grow, and such measures are expected to become a prerequisite for securing coverage.

Q2 Trade Credit Summary

Overall (Challenging)

Market conditions have remained challenging, reflecting financial, exchange rate and political strains in Argentina’s economy.​

Pricing (+1-10%)

Insurers have continued to impose small increases, especially in higher-risk sectors. Lower rates have been achievable for well-performing sectors such as pharmaceutical laboratories.​

Capacity (Constrained) Capacity constraints continued as economic and political challenges have impacted the capacity of insurers and reinsurers.

Underwriting (Rigorous) Underwriting was rigorous and rigid without exception.​.

Limits (Increased) Credit limits have increased, due to local currency valuation and the high rate of inflation.​

Coverages (More Restrictive) Coverages have tightened as insurer concern related to insureds’ financial health has generally grown.

A Look Ahead (Moderate) Driven by necessity, insurers may become more creative in finding solutions that support clients’ evolving needs.​

Q2 Casualty/Liability Summary

Overall (Moderate)

Market conditions have moderated, with expiring pricing, limits and deductibles generally available.

Pricing (Flat)

Flat rates were generally available on renewal.

Capacity (Ample) Capacity was sufficient in most cases.

Underwriting (Prudent) Underwriters remained moderately cautious - in some cases, imposing coverage restrictions on renewal.

Limits (Flat) Expiring limits were maintained in most cases.

Deductibles (Flat) Expiring deductibles were maintained in most cases.

Coverages (More Restrictive) Coverage restrictions were imposed in some cases, especially for poor-performing risks and higher risk industries.

A Look Ahead (Moderate) Current market conditions are expected to continue.

Q2 Directors and Officers Summary

Overall (Moderate)

Market conditions remained moderate in Q2. Insurers sought to retain their portfolios but did not aggressively seek to grow them.

Pricing (+1-10%)

Risks with a low-to-moderate profile (e.g., local exposure only) have experienced modest rate increases while complex and challenging risks (e.g., NYSE-listed companies) have experienced more significant rate increases in some cases.

Capacity (Constrained) Capacity has remained constrained, with few insurers active in this market.​

Underwriting (Prudent) Underwriting has been cautious and conservative, especially on complex and challenging risk types. Environmental, Social and Governance is a growing topic of discussion.

Limits (Flat) Well-performing risks were able to secure expiring limits while those with losses may have experienced slight decreases.

Deductibles (Stable) Expiring deductibles were achieved in most cases; however, risks with NYSE exposure experienced sharp deductible increases. ​

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

A Look Ahead (Moderate) Current market conditions are expected to continue, with increases in deductibles for heavy risks and stability for low-to-moderate risks.

Q2 Property Summary

Overall (Challenging)

Market conditions remained challenging, driven by two forces. First, the changes in local insurers’ reinsurance contracts made in mid-2021 continued to impact capacity, and more insurers were needed to complete placements, resulting in higher pricing. Secondly, the geopolitical events in Eastern Europe created uncertainty related to Terrorism and to Strikes, Riots and Civil Commotion coverages, leading to significant price increases for these coverages.

Pricing (+11-30%)

Rate increases continued due to the need for more insurers to participate on individual risks, and growing concerns related to Strikes, Riots and Civil Commotion as well as Terrorism coverages.

Capacity (Constrained) Changes in the reinsurance market precipitated insurer appetite shifts and capacity contractions for some risk/activity types. As international insurer appetite shifted, international capacity also tightened.

Underwriting (Rigorous) Poor performance in this space has led to a more cautious underwriting approach for many insurers.

Limits (Flat) Expiring limits were achieved in most cases.

Deductibles (Flat) Expiring deductibles were achieved in most cases.

Coverages (Stable) Expiring coverage terms were achieved in most cases.

A Look Ahead (Challenging) Market conditions are expected to follow the outcomes of reinsurance contract renewals at the end of Q2.

Brazil Market Dynamics

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