Q2 Market Dynamics
Modest price increases continued amidst opposing market forces. The impacts of rising inflation as well as continued supply chain and labor challenges pressured pricing upward while improved insurer performance, the mobilization of new capacity, and insurer focus on portfolio retention and growth served to tamp down pricing.
Capacity has expanded and is now generally sufficient, with the most notable exception of Cyber. Property capacity – already tight for Natural Catastrophe exposed risks - has contracted in some markets due to increased aggregate exposures and modeled portfolio loss potential.
While insurers focused on portfolio retention and profitable growth, underwriting discipline remained strong – particularly around risk controls and valuations - and robust, quality underwriting information was a key enabler of superior renewal outcomes.
Limits trended upward in line with inflation-driven increases in exposures and loss costs. Alternative structures such as coinsurance and quota share arrangements continued to serve as useful levers.
Deductibles were generally stable; however, increases, and in some cases, minimum deductibles were required for loss-active risk types or where risk management and progression was not evident.
Coverages remained stable and broader terms were achieved in cases where insurers leveraged coverage as a differentiator. Terms and conditions continued to tighten in response to geopolitical events in Eastern Europe.