Automobile
Challenging market conditions continued, driven by a shortage of parts, the overvaluation of used cars, and inflation - all of which continued to materially squeeze insurer profitability. While well-performing risks experienced rate increases in line with inflation or slightly higher, poor-performing risks experienced more significant rate increases. Capacity remained abundant, with the key exception of risks in the transportation and logistics segment.Underwriting results improved slightly but remained below expectations, leading to continued conservatism. While preferred risks experienced some flexibility, most experienced a rigorous underwriting environment. Looking ahead, challenging market conditions are expected to continue.
Casualty/Liability
While market conditions generally remained moderate, challenging conditions such as reduced capacity and increased pricing were experienced by higher-risk industries such as warehousing, transportation, manufacturing, construction, mining, energy, highway, chemicals, as well as poor-performing risks. Insurers remained focused on profitability, which continued to drive underwriting discipline and rigor, especially related to Product Liability, Product Recall and Employers Liability (when added as an additional coverage). Coverage terms have generally remained stable; however, restrictions were imposed in some cases for Product Recall and Product Liability related to automotive, raw material, chemicals, pharmaceuticals, and food and beverage risks. Looking ahead, current market conditions are expected to continue, with detailed underwriting information becoming even more important.
Cyber
Market conditions remained challenging; however, pricing decelerated for some risks and sectors. Capacity remained constrained and insurers deployed it cautiously, even as demand for Cyber coverage increased. Underwriting remained rigorous and ransomware exposure was heavily scrutinized. Coverage was limited or denied for risks where controls or business resilience were deemed insufficient; however, insurers were willing to reconsider coverage restrictions previously imposed where proper risk controls were in place. Looking ahead, the Cyber market is expected to remain challenging; although, as insurers gain more confidence in this product, insureds may experience some moderation in the terms offered.
Directors and Officers
Market conditions improved as insurer appetite expanded for large and complex risks in both the primary and excess space, and underwriting became more flexible. Some restrictions of coverage, appetite contraction, and price increases were mandated for some risks (e.g., Brazilian companies that trade securities in the US, companies involved in bankruptcy or judicial reorganization, financial institutions, oil & gas companies, mining companies, and companies with operations or exposure in Eastern Europe); however, even for these risks, conditions were more favorable than had been the case previously. Pricing was generally flat and, in some cases, decreases were available. Looking ahead, despite uncertainty surrounding the geopolitical events in Eastern Europe, COVID-19 recoveries, and Brazilian 2022 Elections, current market conditions are expected to continue. The importance of starting the placement process early providing quality underwriting information will continue to increase.
Property
Market conditions continued to vary depending on client industry, claims record, exposure type, and risk management maturity, as well as insurer local underwriting authority. Conditions remained challenging for complex and high hazard risks including energy, heavy chemical, pulp & paper, and logistical warehouses, especially where high limits were required and local capacity was limited. Stricter treaty renewals and updates to local insurer underwriting guidelines resulted in appetite changes and widespread rate increases, even for renewals. While coverage was stable overall, negotiations were challenging related to Strikes, Riots, & Civil Commotion, Contingent Business Interruption and Natural Catastrophe coverages due to poor claims performance in these areas. Looking ahead, current market conditions are expected to continue. Robust, detailed underwriting information will be a key risk differentiator, serving to elevate underwriter confidence and achieve better placement results. Starting the placement process early will continue to be essential. Changes to insurer treaties and underwriting guidelines will continue to create challenges for some risks.
Trade Credit
Uncertainty surrounding the geopolitical events in Eastern Europe, the upcoming elections, and global inflation remained high, leading to ongoing conservatism in underwriting, capacity deployment and coverage terms. Market conditions were challenging; however, competition remained strong which served to keep price increases modest. There has been a notable contraction of coverage related to the geopolitical events in Eastern Europe. Looking ahead, uncertainty surrounding the geopolitical events in Eastern Europe and the upcoming elections is expected to continue, which will likely lead to ongoing underwriting conservatism and capacity deployment. However, as new insurers enter the market, some challenged sectors such as Retail and Agribusiness may experience improved conditions.
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