Q3 Market Dynamics
Pricing
The pricing environment was competitive and healthy. Modest price increases continued, driven upward by inflation, supply chain challenges, and labor shortages, while improved insurer performance, increased capacity, and insurer focus on retention and growth had a dampening effect. Higher risk sectors, poor-performing risks and Natural Catastrophe-exposed risks experienced more significant price increases.
Capacity
Additional capacity entered the market in some areas targeted for insurer growth and was generally sufficient for most risks, with the notable exceptions of the Latin America market as well as Cyber and Natural Catastrophe-exposed risks which faced pressure from the reinsurance market. Alternative solutions such as captives, reinsurance and alternative program structures served as useful levers when needed.
Underwriting
Insurers sought growth and expanded their appetite in targeted areas. Underwriting discipline remained strong – particularly around risk controls and valuations – and robust, quality underwriting information was a key enabler of superior renewal outcomes.
Limits
Limits trended upward in line with inflation-driven increases in exposures and loss costs. Portfolio adjustments were not common; downward adjustments were generally made on a case-by-case basis.
Deductibles
Deductibles were generally stable; however, increases, and in some cases, minimum deductibles were applied to loss-active risks and designated poor-performing sectors.
Coverages
Coverage terms were generally stable; however, exclusions continued to be applied for Terrorism, Cyber, War & Sanctions, Political Violence, and Communicable Disease. Territory restrictions related to Ukraine, Belarus, Russia and Myanmar continued.
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