Automobile
Market conditions were challenging, driven largely by a deterioration of loss ratio performance, as well as rising inflation which in turn has driven up vehicle values, and continued supply chain disruption. Most risks – even those that performed well – experienced double digit rate increases. Underwriting was rigorous and slow; TCOR analysis played an important role. Looking ahead, market conditions are expected to remain challenging as insurers focus on improving portfolio performance. Insurer negotiations are expected to remain challenging and time-consuming. Data-driven insights will continue to support client decision-making.
Casualty/Liability
Market conditions remained challenging for poor-performing and / or higher-hazard risks such as energy, power and storage facilities, which experienced capacity constraints and limited appetite. Well performing, in-appetite risks experienced more a favorable market environment. Price increases were common across much of the portfolio as insurers sought to achieve profitability targets. Reinsurance continued to be an important source of capacity, particularly where local appetite was limited. Underwriting referrals were common. Looking ahead, current market conditions are expected to continue.
Cyber
The Cyber market – including both insurers and reinsurers – remained challenging. Rates continued to increase steeply, especially for complex risk types like energy, financial institutions, fintech, utilities, tech, education and health, and where controls were deemed insufficient. Local capacity remained limited but capacity from international (re)insurers was available to meet the needs of most risks. Underwriting was rigorous, especially for complex risks for which supplemental questionnaires were often required. Multi-Factor Authentication was a very important underwriting requirement. Insurers continued to manage deductibles upward, including waiting periods and coinsurance for ransomware and Business Interruption. Looking ahead, current market conditions are expected to continue.
Directors and Officers
Driven by poor loss performance and rising technical reserves on long-tail claims, market conditions remained challenging, characterized by significant price increases, a limited market (very few insurers writing this line) and, for insurers that have remained, a withdrawal of capacity for out-of-appetite risk types. Insurers were highly selective and tended to avoid US-exposed risk (Side C). Local underwriting authority remained limited. Reinsurance support was often needed to complete placements. Looking ahead, current market conditions are expected to continue in the short run. Insureds with exposure to the local regulator, Contraloria, will continue to face challenges as underwriters will remain cautious on these risks.
Property
Market conditions were moderate in Q3 with the key exception of coverage for political violence which was challenged due to political stability concerns. Signs of price stability emerged, and flat renewals were achievable in some cases; however, where facultative reinsurance was needed (e.g., pharmaceuticals, textiles, plastics, pulp and paper, chemicals, energy, power and political violence coverage), moderate increases remained the norm. Underwriters conducted detailed risk analysis and looked carefully at the implementation of loss control programs. Looking ahead, current market conditions are expected to continue. Political violence coverage will remain under scrutiny as political stability concerns continue.
Trade Credit
Market conditions remained generally stable, despite the governmental transition. Appetite remained healthy and capacity was sufficient, with the key exception of challenging risk types. The new government health reforms created challenges within the health sector and some limit reductions were imposed on related risks. Looking ahead, current market conditions are expected to continue.!
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