Pricing
Price increases continue across most geographies and policy lines, although the general environment is stabilizing following material adjustments made during past renewal cycles. The difference in pricing between in-appetite and out-of-appetite risks and policy types continues to expand, with the former experiencing a far greater moderation in pricing.
Capacity
Insurers remain cautious and are focused on minimizing portfolio volatility while looking to grow from a more stable base. New capacity has entered the market in some spaces, but Directors & Officers, Professional Indemnity and Cyber placements continue to experience constraints.
Underwriting
Underwriting rigor has intensified and risk differentiation is key to achieving the best possible outcomes. Local underwriting authority remains limited in some areas with many line underwriters wary of testing their underwriting boundaries.
Limits
With a stabilization of capacity, the policy limit decision is returning to the buyer, and there is a trend amongst insureds to explore options to optimize risk transfer cost or better reflect changing exposure in a post COVID-19 landscape. Sub-limits for higher hazard perils and risks; however, remain under continued pressure.
Deductibles
There has been little or no movement in deductible requirements across most policy lines with the key exception of Cyber, where retention requirements continue to increase. There is a growing number of insureds exploring deductible options to help offset increases in broader risk transfer spend.
Coverages
Global underwriting mandates continue to be imposed on local underwriting portfolios. Coverage is heavily scrutinized and restrictions for Infectious Disease, Silent Cyber, and Contingent Business Interruption continue, driven largely by reinsurance requirements. New language around climate change and sustainability is emerging.
Australia Market Dynamics
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