Geography Trends Q2 Asia Pacific

Hong Kong

Market Dynamics

Q2 Automobile Summary

Overall (Moderate)

Market conditions have been favorable, largely due to competition.

Pricing (Flat)

Insurers, keen to retain their existing market share, in some cases offered flat pricing even on risks that had not performed well. Well-performing risks often achieved rate reductions as a result of healthy market competition.

Capacity (Ample) Although there is a limited market for fleet motor insurance, capacity remains sufficient.

Underwriting (Prudent) Insurers remain cautious and focused on profitability. Comprehensive cover has been profitable while third party cover has run at a loss in recent years.

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

Deductibles (Flat) Expiring deductibles were achieved in most cases; however, increases were imposed on some poorly-performing risks in order to manage premium costs.

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

A Look Ahead (Moderate) Current conditions are expected to continue, including favorable conditions for large and well-performing risks. Early engagement with insurers remains key to achieving favorable results.

Q2 Cyber Summary

Overall (Challenging)

Market conditions remained challenging with more restrictive underwriting and coverage, coupled with higher pricing and deductibles.

Pricing (>30%)

Pricing has increased significantly due to increasing risk exposures and loss trends.

Capacity (Constrained) Capacity remained constrained as insurer appetite narrowed.

Underwriting (Rigorous) There has been an increasing reliance on third party checks (by open port scanning, for example) and on assessments made by insurers’ own cyber risk engineers.

Limits (Decreased) Limit reductions have been used by insurers to selectively manage their exposure to each risk.

Deductibles (Increased) Deductibles increased once again, and the waiting period increased significantly for complex risks.

Coverages (More Restrictive) Insurers have continued to impose new restrictions on both complex risks and SMEs.

A Look Ahead (Challenging) The current, challenging market conditions are expected to continue.

Q2 Employers Liability/Workers Compensation Summary

Overall (Moderate)

Insurer appetite for well-performing risks strengthened, and the market has generally become more active.

Pricing (Flat)

Prices have generally remained stable, and competition is healthy for well-performing risks.

Capacity (Abundant) Capacity has remained abundant.

Underwriting (Prudent) Underwriting remained prudent. Insurers responded favorably to risks with more detailed underwriting information – especially in relation to risk improvement and staff training – by offering better terms.

Limits (Flat) Limits were as required by statute.

Coverages (Stable) Coverage is mandated by the Employees’ Compensation Ordinance, which has not been amended recently.

A Look Ahead (Moderate) The market is expected to remain stable, with flexibility on larger risks, as insurers focus on profitable growth and retention. Long term agreements may be available.

Q2 Trade Credit Summary

Overall (Moderate)

The market stability that began in late 2021 has continued. Appetite has expanded as insurers have focused on profitable growth. Improvements to renewal terms could be achieved.

Pricing (Flat)

Flat pricing could be achieved in most cases.

Capacity (Ample) Despite focused insurer appetite, capacity remains generally sufficient.

Underwriting (Prudent) Underwriters conducted a deeper level of due diligence to support their position before they provided terms or indications.

Limits (Increased) Limits slightly increased from 2021 while limit utilization was closely monitored by underwriters.

Deductibles (Flat) Deductible trends were flat and often they were adjusted in order to improve other terms rather than to control exposure.

Coverages (Stable) Coverage remained stable with the exception of certain high-risk sectors.

A Look Ahead (Moderate) The geopolitical events in Eastern Europe have not had an impact on the Hong Kong market, which is expected to remain stable in the coming quarter.

Q2 Casualty/Liability Summary

Overall (Moderate)

Market conditions were moderate to slightly favorable. Insurer appetite for new business has been healthy, creating competition for well-performing local and regional risks.

Pricing (Flat)

Flat to slightly decreased pricing was achieved for well-performing local risks, while pricing for complex or global programs was generally flat.

Capacity (Ample) As insurer appetite was healthy – especially for new local and regional business – capacity has been generally sufficient.

Underwriting (Flexible) Both local and international insurers demonstrated flexibility and openness towards well-performing local and regional risks.

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

Deductibles (Flat) Expiring deductibles were achieved in most cases. Some growth-focused local insurers created competition by offering deductible options for well-performing local risks.

Coverages (Stable) Coverages remained generally stable.

A Look Ahead (Moderate) Current market conditions are expected to continue, with healthy competition on well-performing local or regional risks.

Q2 Directors and Officers Summary

Overall (Moderate)

Market conditions have moderated, with the key exceptions of higher-risks sectors (e.g., SPACs) and risks with adverse claims experience.

Pricing (+1-10%)

Price increases continued in Q2. Rate increases for SME D&O were minimal, while for higher-risk, well-performing sectors, they were slightly higher. Poorly-performing risks and challenging risk types (e.g., SPACs) tended to follow US market trends, with more significant increases.

Capacity (Constrained) Insurers have continued to cap capacity to limit exposure to specific risk types. Capacity remains notably constrained on Hong Kong SPACs.

Underwriting (Prudent) Underwriting remained cautious as insurers sought to manage underwriting profitability.

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

Deductibles (Flat) Expiring deductibles were achieved in most cases, with the exception of deductibles on US risks, which were generally in line with the US D&O landscape.

Coverages (Stable) Global mandates continued. Across-the-board, insurers implemented exclusions related to the geopolitical events in Eastern Europe, regardless of whether the insured had a presence or exposure in those countries.

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

Q2 Property Summary

Overall (Moderate)

Complex risks and multinational programs, particularly those with Natural Catastrophe risk exposures, were challenging across both price and capacity while local and SME risks experienced moderate to soft market conditions. Coverage and conditions remained stable with the key exception of exclusions for the geopolitical events in Eastern Europe and Myanmar.

Pricing (Flat)

Pricing has generally been flat but has varied according to risk size and performance: local, SME, and well-performing risks experienced modest rate reductions while multi-national, complex and poorly-performing risks experienced rate increases.

Capacity (Ample) Insurers generally maintained capacity levels, and these were generally sufficient with the key exception of locations with Natural Catastrophe exposures, for which coverage is tight.

Underwriting (Prudent) International insurers remained conservative, while some growth-focused local insurers demonstrated flexibility and openness.

Limits (Increased) While expiring limits were common, inflation-driven limit increases were achievable in most cases.

Deductibles (Decreased) While expiring deductible levels were common, decreases were available for well-performing, non-Catastrophe-exposed risks in most cases.

Coverages (Stable) Exclusions and clarifications continued to be applied related to War & Terrorism, Data Distortion/Corruption, Political Risk, Sanctions, Seepage Pollution & Contamination, Data Loss, Cyber, Communicable Disease, and the geopolitical events in Eastern Europe and Myanmar.

A Look Ahead (Moderate) Competition for well-performing risks and new business is expected to increase. As insurers focus on profitability, modest rate increases are expected to continue for complex and multinational programs. Available capacity is expected to be sufficient for most risks.

Singapore Market Dynamics

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