Geography Trends Q2 EMEA and the UK


Market Dynamics

Q2 Automobile Summary

Overall (Challenging)

Market conditions became more challenging in Q2, driven by impacts from COVID-19, product shortages, market closures in China, inflation and the geopolitical events in Eastern Europe.

Pricing (+1-10%)

Pricing increased in Q2 due to rising repair costs and inflation.

Capacity (Ample) Capacity was sufficient for most risks.

Underwriting (Prudent) Insurers became more conservative and cautious in Q2, and underwriting became more stringent.

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

Deductibles (Increased) Deductible increases became more common in Q2; however, expiring deductibles could be achieved for some smaller and/or well-performing risks.

Coverages (Broader) As Auto risks continued to become more technology-driven, insureds have increasingly sought more flexible and innovative coverages.

A Look Ahead (Challenging) Challenging market conditions are expected to continue. Pricing will likely continue to increase as inflation, the geopolitical events in Eastern Europe and other issues add to insurer uncertainty.

Q2 Cyber Summary

Overall (Challenging)

Market conditions remained challenging in Q2. Rate increases continued and underwriting requirements remained onerous for insureds. Risks stemming from geopolitical events in Eastern Europe remained a top concern for insurers.

Pricing (>30%)

Rate increases varied by risk size and complexity, with smaller risks experiencing moderate increases while multinationals experienced severe – sometimes triple-digit – increases.

Capacity (Constrained) Capacity remained significantly constrained in Q2.

Underwriting (Rigorous) Underwriting remained stringent and rigorous in Q2 as information demands from insurers continued to increase. Insurers remained conservative, and there was little to no flexibility in underwriting.

Limits (Decreased) Limit decreases were mandated in response to continued increases in loss costs and underwriter focus on limiting per-risk exposure.

Deductibles (Increased) Ransomware attacks remained in sharp focus in Q2, and related deductible increases continued to be imposed.

Coverages (More Restrictive) Restrictions such as "Log4Share", territory adjustments, and war exclusions continued to be introduced.

A Look Ahead (Moderate) Current market conditions are expected to continue, with challenging conditions expected to remain for the rest of the year.

Q2 Property Summary

Overall (Moderate)

Market conditions generally stabilized in Q2 following the challenging conditions that had been experienced as a result of the major flood losses of 2021.

Pricing (+1-10%)

Modest price increases remained the norm in the second quarter, with small to medium-sized risks experiencing more challenging conditions as insurers focused on profitability.

Capacity (Ample) While local capacity was insufficient for some industries and risk types, international market capacity was generally available to fill any gaps.

Underwriting (Prudent) Underwriting remained prudent, and detailed underwriting information was required in most cases. Distressed industries may experience a contraction of capacity or underwriting appetite.

Limits (Flat) Expiring limits were achieved in most cases; however, insurers remained focused on limit accumulation and implemented strategies to reduce limits where deemed necessary.

Deductibles (Increased) To help offset premium increases, it was common for insureds to request deductible increases in Q2.

Coverages (Stable) Expiring coverages were achieved in most cases. Any limitations were imposed on a case-by-case basis.

A Look Ahead (Moderate) Current market conditions are expected to continue for the rest of the year. Mid-market risks are expected to remain less profitable than the larger risk space and as a result, insurers are expected to continue to review and reprice their mid-market portfolios.

Q2 Casualty/Liability Summary

Overall (Moderate)

Market conditions remained favorable for mid-sized risks. Larger and complex risks experienced more challenging conditions as insurers were more conservative in terms of pricing and terms offered.

Pricing (+11-30%)

Driven largely by inflationary pressure, price increases continued in Q2, particularly for large and complex risks.

Capacity (Ample) Capacity remained stable and was available for most risks despite de-risking and line re-sizing across certain insurers.

Underwriting (Prudent) While underwriting was prudent, large and complex risks experienced a more stringent environment. Product Recall and Product Liability continued to experience the most challenging underwriting environment. Insurer appetite guidelines were applied rigidly for new risks.

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

Deductibles (Increased) A number of industries and coverages experienced mandatory deductible increases to meet insurer requirements. Deductible options were explored as a mechanism for reducing premium increases.

Coverages (Stable) Coverages remained stable in Q2, even as insurers conducted coverage reviews for complex risks. Cyber exclusions were mandated by some insurers.

A Look Ahead (Moderate) Current market conditions are expected to continue. Appetite will remain strong for mid-sized risks with low complexity, as insurers continue to seek growth in this space. Underwriting scrutiny is expected to intensify, particularly for large or complex risks. Inflation will likely continue to drive rate increases.

Q2 Directors and Officers Summary

Overall (Challenging)

The market continued to moderate in Q2, although conditions remained challenging due to inflationary pressures and uncertainty related to the geopolitical events in Eastern Europe. Insurer appetite for new business expanded, even as underwriting scrutiny remained high.

Pricing (+11-30%)

Price increases moderated slightly, except in cases where risk profiles expanded and/or became less favorable.

Capacity (Ample) Market capacity remained sufficient and even increased slightly as insurer appetite expanded.

Underwriting (Prudent) Underwriting scrutiny remained high, especially for COVID-impacted sectors, SPACs and US-listed companies.

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

Deductibles (Flat) Following Side B and C deductible adjustments in recent years, expiring deductibles were achieved in most cases in Q2.

Coverages (Stable) Expiring coverages were achieved in most cases; however, coverage restrictions related to geopolitical concerns increased in Q2.

A Look Ahead (Challenging) Despite more moderate market conditions, they will remain somewhat challenged. Additional limits may become available as appetite expands and more capacity becomes available.

Q2 Trade Credit Summary

Overall (Moderate)

Market conditions were stable overall as insurers competed on pricing, even though the rate of insolvencies increased in certain sectors and was expected to increase further. Demand for Trade Credit continued to strengthen, driven by economic uncertainty as well as the availability of enhanced financing options.

Pricing (Flat)

Flat pricing was achieved in most cases; however, larger and/or well-performing risks may have experienced rate decreases.

Capacity (Ample) Capacity remained sufficient, and reinsurance capacity remained available.

Underwriting (Prudent) Amidst growing economic uncertainty, underwriting conservatism was prevalent.

Limits (Flat) Costs rose in Q2, especially for certain sectors, driven by the events in Eastern Europe as well as inflation. As a result, additional limits were requested by insureds. In some cases, insurers were able to accommodate such requests; however, in many cases, limits remained flat.

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

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

A Look Ahead (Challenging) Insolvencies and credit risk are expected to increase, which may pressure limits. Claims escalation is expected to impact underwriting, making some renewals more challenging.

Iberia Market Dynamics

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