Automobile
Market conditions remained stable as insurers continued their focus on profitability (although a small few were focused more so on growth). Capacity remained stable and sufficient. As a result of increased support – including more charging stations – Electric Vehicle usage continued to increase. The cost of repairs for Electric vehicles remained generally low (except for the battery unit) allowing insurers to maintain current pricing models. Looking ahead, as insurers remain focused on profitability, current moderate market conditions are expected to continue, and insurers will remain focused on monitoring claims development.
Casualty/Liability
Market conditions remained stable and were characterized by sustained underwriting discipline. Modest rate increases continued, and flat renewals were achieved for an increasing number of risks – especially well-performing risks and those with robust risk management. Capacity constraints remained for pure financial loss, errors & omissions, product recall extensions and for US- and Canada-domiciled operations. Challenging risk types and poor performing risks were required to provide more extensive information than insureds with well-performing and in-appetite risks. Insurers tended to be more flexible on risks with proven loss control measures and detailed underwriting information with an increasing number of insurers willing to negotiate on coverage. Looking ahead, insurers are expected to remain cautious as persistent and widespread inflation is weighing on their bottom lines. An increasing number of insurers may be willing to negotiate on coverage.
Cyber
Market conditions remained challenging, although rate increases moderated slightly depending on industry and cyber security posture. Underwriting scrutiny remained heightened. Capacity increased slightly, and insurers demonstrated more appetite on excess layers and high attachment points. Ransomware controls remained a key topic of underwriting focus. Coverage restrictions continued to be applied, as did sub-limits and co-insurance, especially as respects ransomware. Looking ahead, driven by a challenging risk landscape with ongoing cyber threats, market conditions are expected to remain challenging. Insurers are expected to remain conservative in their strategies, coverage terms, and deployment of capacity.
Directors and Officers
Market conditions further stabilized, especially for well-performing sectors. Price increases continued but tempered significantly. Market cap growth was a key pricing consideration. Underwriting was more flexible; however, queries related to the events in Eastern Europe, as well as ESG activities, continued. Capacity was sufficient as new insurers – mostly focused on mid-to-high excess of loss positions – entered this space. Deductibles remained elevated for higher-risk segments such as US-listed, SPACs, de-SPAC, and IPOs. Looking ahead, current, stable market conditions are expected to continue.
Property
Market conditions remained stable. Insurers sought growth opportunities but were focused in their risk selection. Many insurers typically focused on reinsurance business shifted their focus to retail business. International insurers adhered strictly to their underwriting guidelines with minimal room for negotiating and limited flexibility, especially for challenging risks. Quality underwriting submissions and proactive risk management measures led to superior outcomes. Capacity was generally sufficient but was deployed cautiously on non-preferred risks. Inflationary pressures drove insurers to push for valuation exercises and limit increases could be achieved in consideration of increased asset valuations, subject to constraints related to accumulation and Natural Catastrophe limits. Looking ahead, capacity may increase as insurers expand their appetite for non-Natural Catastrophe risks. Insurers will continue to scrutinize asset valuations and may introduce average clauses rather than making a more arbitrary link between values and rate in the absence of adjustment to asset values or valuation methodology. Insurers will remain concerned about the potential impacts of climate change and natural catastrophes.
Trade Credit
Market conditions were generally stable and competitive pricing and terms could be obtained from incumbent and competing insurers alike. While appetite has slowly strengthened, insurers remained selective and conservative in their underwriting of higher risk sectors. Capacity remained stable with the key exceptions of risks in higher risk sectors or those that were impacted by the pandemic. Looking ahead, geopolitical events in Eastern Europe are raising financing costs and commodities prices and impacting supply chains. Insurers are monitoring for further deterioration which may impact insurance market conditions.
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