Q2 Automobile Summary
Overall (Moderate)
Despite recent increases in Certificate of Entitlement (COE) costs which drove the market value of vehicles upward, the motor insurance market remained stable, with costs tamped down by transactional gains from higher sales volume and less costly replacement of vehicles, including electric and hybrid. With Singapore businesses resuming and normalizing post-COVID, insurers kept a watchful eye on motor claims.
Pricing (Flat)
Insurers were conservative in their pricing approaches in anticipation of rising claims costs due to inflation and increased business activity.
Capacity (Ample)
Capacity remained stable and sufficient.
Underwriting (Prudent) While underwriting remained cautious, insurers balanced this caution with their growth goals as they sought to gain market share following the withdrawal of a key insurer from this space.
Limits (Flat)
Insurers applied standard market value and limits of liability.
Deductibles (Flat)
Expiring deductibles were achieved in most cases.
Coverages (Stable) Expiring coverages were achieved in most cases.
A Look Ahead (Moderate) Existing market conditions are expected to continue as insurers compete for market share following the withdrawal of a key insurer, but this growth focus will be balanced with conservatism around rising costs.
Q2 Cyber Summary
Overall (Challenging)
Market conditions remained challenging though there were signs of a modest deceleration. Underwriting scrutiny remained strong.
Pricing (+11-30%)
Rate increases varied widely based on industry, segment and cybersecurity posture but overall showed a modest deceleration.
Capacity (Constrained) Capacity remained constrained with some insurers preferring a high attachment point or excess layer position.
Underwriting (Rigorous) Underwriting was rigorous and insurers continued to require detailed information and supplementals. In some cases, evidence of cybersecurity measures/scan reports remained a pre-requisite for receiving a quote.
Limits (Flat) Expiring limits were achieved in most cases.
Deductibles (Flat) Expiring deductibles were achieved in most cases.
Coverages (Stable) Expiring coverage could be achieved in most cases; however, ransomware coverage clarifications were imposed if not required at past renewals.
A Look Ahead (Challenging) The market is expected to remain challenging, driven primarily by a heightened cyber threat environment, insurer profitability management strategies, and continued capacity constraints.
Q2 Employers Liability/Workers Compensation Summary
Overall (Moderate)
Market conditions remained moderate in Q2. Rates and coverage were stable except where risk profiles had changed. Insurer appetite remained healthy.
Pricing (Flat)
Pricing remained flat following the changes that had been previously mandated by the Work Injury Compensation Act in 2020 and 2021.
Capacity (Abundant) Work Injury Compensation insurance remained attractive to insurers and as a result, capacity was abundant.
Underwriting (Flexible) Underwriting became more flexible in Q2, with insurers offering enhanced conditions as a differentiator.
Limits (Flat) Limits remained in accordance with and stipulated by the Work Injury Compensation Act.
Coverages (Stable) Coverages are established by the Work Injury Compensation Act and so remained stable in Q2.
A Look Ahead (Moderate) It is expected that market conditions will continue, provided there are no further changes to relevant regulations.
Q2 Trade Credit Summary
Overall (Moderate)
Market conditions remained moderately favorable in Q2. Renewals with incumbent insurers remained stable and competitive terms could be obtained from non-incumbent insurers. Insurers were receptive to lower rates for well-performing risks but remained selective and prudent for higher-risk sectors. Although insurers remained prudent, their appetite has gradually increased.
Pricing (Flat)
Pricing was stable though prices remained higher than those seen in the market before the pandemic. Insurers were prepared to offer lower or competitive rates for well-performing renewals.
Capacity (Ample) Coverage remained stable, with the exception of sectors affected by the pandemic and high-risk sectors. Insurers remained cautious in their capacity deployment due to uncertainty around the geopolitical events in Eastern Europe, which may affect capacity.
Underwriting (Prudent) Insurers remained cautious and selective but demonstrated flexibility for well-performing risk types. Insurers remained highly conservative in sectors such as iron and steel, shipbuilding and construction.
Limits (Increased) Due to the ongoing supply chain challenges, coupled with inflation, limit requirements rose materially.
Deductibles (Flat) Deductibles were generally stable, with the exception of poorly-performing risks, where deductible increases were mandated.
Coverages (Stable) Some coverage improvements were achieved, primarily for well-performing portfolios with a good loss history.
A Look Ahead (Moderate) Current market conditions are expected to continue; however, the geopolitical events in Eastern Europe are impacting the supply chain, which may affect insurer behaviors.
Q2 Casualty/Liability Summary
Overall (Moderate)
Market conditions were generally stable in Q2, even as uncertainty related to inflation, litigation costs and interest rates continued.
Pricing (+1-10%)
Modest rate increases continued, with poorly-performing risks and risks in high hazard industries experiencing more significant increases. Insurers remained focused on risk selection and rate adequacy.
Capacity (Ample) Capacity was sufficient for most risks; however, constraints remained for Errors & Omissions and Product Recall expense extensions, as well as for US and Canada domiciled operations.
Underwriting (Prudent) Underwriting approaches remained cautious; however, insurers tended to be more flexible and accommodating when quality and detailed underwriting submissions were provided, and for well-performing and in-appetite risks. Extensive information was required for poorly-performing risks and risks in high hazard industries.
Limits (Flat) Expiring limits were achieved in most cases, but increases could be achieved for some well-performing, in-appetite risks.
Deductibles (Flat) Expiring deductibles were achieved in most cases. Few insureds opted to reduce their deductibles as premium reductions were deemed incommensurate with the increased risk.
Coverages (Stable) Coverage continued to stabilize as clarifications around key risk concerns had already been imposed on prior renewals. Errors & Omissions, Product Recall and US/Canada domiciled operations remained outside the risk appetite of some insurers.
A Look Ahead (Moderate) The market overall is expected to remain strong. Insurers will remain cautious as the impacts of inflation, interest rate movement and litigation costs unfold.
Q2 Directors and Officers Summary
Overall (Moderate)
As insurer focus has shifted to profitable growth, market conditions have stabilized overall.
Pricing (+11-30%)
Pricing increased in Q2 in line with risk growth stemming from business expansion (organically or through acquisitions).
Capacity (Ample) Capacity was sufficient; however, insurers were selective in how it was deployed, with limited appetite for certain industries, and for risks with exposures in the US, Canada, Australia, Russia or related territories.
Underwriting (Prudent) Underwriting remained prudent; however, additional questions concerning Russia and related territories were mandated.
Limits (Flat) Expiring limits were achievable and insurers were willing to provide higher limits for preferred risks upon request.
Deductibles (Flat) Deductible level remained stable following the substantial adjustments made during the last two years; however, Australia, US and Canada risks are all experiencing higher deductible mandates.
Coverages (Stable) Coverages remained generally stable with the exception of the requirement by some insurers to include a Territory Restriction Endorsement for Russia and related territories.
A Look Ahead (Moderate) Territory Restriction Endorsements for Russia and related territories are expected to be mandated by more insurers.
Q2 Property Summary
Overall (Moderate)
Market conditions remained stable. Insurers sought growth opportunities but were focused in their risk selection. Poor-performing risk types, including agriculture and chemicals, experienced more challenging conditions, especially following the withdrawal of a key insurer from the market. Capacity needs were met through existing insurers as well as new market entrants.
Pricing (+1-10%)
Well-performing risks with strong risk controls experienced modest rate increases, while challenging risk types and poor-performing risks faced more significant rate increases. Local insurers tended to quote more competitively than international insurers, although capacity constraints were more common with the former.
Capacity (Ample) Capacity varied based on risk profile. Challenging risks have experienced more options from local insurers, although often with constrained line sizes.
Underwriting (Prudent) Local insurers have shown flexibility in their terms while international insurers have tended to adhere more strictly to their underwriting guidelines. Quality underwriting submissions and proactive loss control measures remain key differentiators.
Limits (Flat) While most placements renewed with expiring limits, increases were available as needed to adjust for increased asset valuations, with the notable exception of Natural Catastrophe limits.
Deductibles (Flat) Expiring deductibles were achieved in most cases.
Coverages (Stable) Coverages remained stable with the key exception of mandatory cyber exclusions and exclusions for exposures in Belarus, Russia and Ukraine.
A Look Ahead (Moderate) Insurers are expected to continue to scrutinize insurable asset values, which have not kept pace with inflation or with supply and demand pressures. Claims inflation will continue to pressure insurers' overall combined ratio, potentially leading to a heightened focus on asset valuations and profitability. Where new market capacity is required, starting the process early is very important.
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