Automobile
Market conditions remained moderate, despite inflationary pressure on loss costs. Appetite contracted for challenging risk types such as transport/carriers but local capacity remained abundant. Underwriting scrutiny and caution remained high and loss frequency remained the most significant insurer concern. Looking ahead, with some exceptions related to non-preferred risk types or those with high claims frequency, current market conditions are expected to continue even with inflation continuing to pressure costs. Auto is one of the products that insurers leverage to retain global clients.
Casualty/Liability
Market conditions were moderate with the key exceptions of challenging risk types such as those with US exposures, PI (for professional orders), Medical Malpractice or those requiring facultative reinsurance. Due to inflation, pricing increased slightly for most risks – even those with favorable performance. Capacity was abundant, especially in excess layers and shared placements. Exclusions applicable to the geopolitical events in Eastern Europe remained. Looking ahead, market conditions are expected to remain stable in the face of ongoing impacts from social inflation and economic contraction.
Cyber
Market conditions remained challenging. Appetite for primary placements was limited. Underwriting remained stringent and rigorous. Evidence of minimum cyber security measures was required for quoting, and for some risk types such as utilities, coverage was difficult to secure without documentation of a prior diagnostic. Capacity expanded slightly for Excess layers as Increased Limits Factors exceeded 80%. Coverage rrestrictions continued to be imposed for war, infrastructure, widespread events, biometric data, and designated territories. Looking ahead, a slight market stabilization is expected.
Directors and Officers
The market stabilization that began earlier this year continued into Q3; however, market conditions varied based on primary versus excess, with the former seeing moderate market conditions (flat pricing sufficient capacity) while the latter experienced a favorable environment (price decreases, abundant capacity, healthy, growth-focused competition amongst insurers). Also, challenging risk types such as US-exposed, those experiencing distress, and those with a poor loss history experienced a challenging environment regardless of primary or excess. Underwriting was generally flexible, although there was a focus (and limitations) on insolvency clauses and bankruptcy proceedings following the end of the bankruptcy moratorium in July 2022. Looking ahead, due to economic concerns, insurers are expected to remain conservative, especially in the primary space, while excess appetite and capacity will likely remain healthy.
Property
Conditions varied widely based on risk size and whether reinsurance participation was required, with the latter experiencing a challenging environment characterized by limited capacity, constrained coverage terms, and material price increases. These conditions were driven by Natural Catastrophe losses, client activity, risk quality and global inflation. Regardless of risk size, underwriting was rigorous and stringent, with significant pressure on insuring to value. Looking ahead, market conditions will depend on developments in the global economy and Natural Catastrophe losses. New capacity may have a favorable impact on the market environment for larger risks.
Trade Credit
Market conditions remained favorable in Q3. Downward pressure on rates continued as favorable loss ratios led to healthy appetite and competition in the market. Limit increases and deductible decreases remained available. Looking ahead, current market conditions are expected to continue.
©2022 Aon plc. All rights reserved | Contact Us | Privacy Policy | Legal