Q2 Casualty/Liability Summary
Market conditions stabilized in Q2, with most risks experiencing modestly favorable conditions while others – especially insureds with US exposure – experienced more challenging conditions. Inflationary pressures have become a key area of concern.
Modest price increases continued but varied widely based on the technical performance of the risk.
Capacity increased in Q2 as new insurers entered the Casualty/Liability market, which compensated for the capacity lost when some existing insurers reduced the size of their offerings.
Underwriting remained rigorous, with little appetite for challenging risk types such as rail and pharmaceuticals.
Expiring limits were achieved in most cases.
Deductible increases continued to be explored in Q2 as a mechanism for offsetting premium increases.
Expiring coverages were achieved in most cases with the key exception of exclusions related to the geopolitical events in Eastern Europe.
A Look Ahead (Challenging)
Economic pressures are expected to increase which is likely to tighten market conditions, potentially leading to underwriting and pricing conservatism.
Q2 Directors and Officers Summary
The market experienced further stabilization in Q2, with competition strengthening as new insurers entered this space. Conditions overall were modestly favorable, especially as compared to the conditions seen in 2020 and 2021.
Pricing varied widely from based on primary versus excess, with the former seeing modest increases while the latter experienced decreases.
Having been constrained earlier in the year, capacity was abundant in Q2, mostly due to the entry of new insurers into the Spanish market and increased capacity offered by existing insurers.
Driven by competitive forces as new capacity became available, the underwriting environment shifted markedly in Q2 to become more flexible and accommodating.
Expiring limits were achieved in most cases and sub-limits increased on a case-by-case basis.
Expiring deductibles were achieved in most cases.
Expiring coverages were achieved in most cases with the exception of mandated exclusions related to the geopolitical events in Eastern Europe.
A Look Ahead (Moderate)
As insolvency reforms continue, insurers are expected to remain conservative, especially related to primary coverage. Excess appetite is expected to remain strong, keeping capacity abundant and market pricing competitive.
Q2 Property Summary
Conditions varied widely based on risk size. The market for larger risks was moderate-to-challenging: insurers sought growth and new insurers entered this space, but appetite remained focused. Smaller and mid-sized risks experienced more challenging conditions, with limited capacity, constrained coverage terms, and material price increases.
Large risks experienced modest rate increases and some flat renewals while most small to mid-sized risks experienced significant increases.
Larger risks experienced sufficient capacity and options while smaller and mid-sized risks saw a constrained market, especially when reinsurance was required.
Regardless of risk size, underwriters adhered to guidelines stringently and required detailed underwriting information.
Expiring limits were achieved for larger risks while reductions were often imposed on smaller and mid-sized risks.
Expiring deductibles were achieved for larger risks while increases were often imposed on smaller and mid-sized risks.
Coverage remained stable in Q2 with changes imposed only on a case-by-case basis.
A Look Ahead (Moderate)
The large risk space is expected to experience moderate conditions, with some challenges depending on the global economy, natural catastrophe losses, and new capacity entering the market. The rest of the market is expected to continue to be challenging.