Q4 Automobile Summary
Overall (Moderate)
As a full annual renewal cycle has occurred since the rate reform of 2020 (which led to widespread rate decreases), the market – including pricing - has stabilized.
Pricing (Flat)
Rates have flattened, as the rate reform adjustments have already been applied and regulations have not called for further price changes. The China Bank and Insurance Regulatory Committee (CBIRC) is drafting new electric vehicle (EV) rating models which may be less than the tariff rate despite an EV loss ratio exceeding 150%.
Capacity (Constrained) At current pricing levels, appetite and capacity is constrained. Heavy risks such as taxis, mixer trucks, and dump trucks are facing a very limited market.
Underwriting (Prudent) Auto underwriters are cautious and selective in light of government pricing regulation making heavy risks unprofitable.
Limits (Increasing) As the road accident compensation standard has risen, there is a growing trend amongst insureds to increase their limit. Limit increases are broadly available in the market.
Deductibles (Flat) The September, 2020, insurance reforms stipulated that deductibles no longer apply to Auto coverage. So, while historically, deductible buy-backs were common, they are no longer needed as deductibles have essentially been reduced to nil.
Coverages (Broadening) Basic coverage terms are standardized nationally, and there is a trend to broaden them, driven by insureds looking to secure more coverage now that prices are lower, and also by insurers looking to maintain premium levels in the face of reduced rates.
A Look Ahead (Moderate) Conditions will continue to align with government regulation. New tariff rates and wording for electric vehicles are expected to be released in early 2022.
Q4 Cyber Summary
Overall (Challenging)
Market conditions are challenging due to elevated risks and losses, particularly related to ransomware.
Pricing (+11-30%)
Significant price adjustments are being applied nearly across-the-board.
Capacity (Constrained) Capacity is constrained as insurers remain cautious about frequency and severity of loss. Global insurers have reduced their per-risk capacity.
Underwriting (Rigorous) Underwriting is stringent and rigorous, with extensive, detailed information being required, particularly related to Operational Technology.
Limits (Flat) Expiring limits can be achieved in most cases.
Deductibles (Increasing) Increases to deductibles and waiting periods are being mandated on most risks.
Coverages (Restricting) Coverage restrictions, especially related to ransomware and data breach investigations, are being imposed.
A Look Ahead (Challenging) Insurers are expected to update their underwriting guidelines in 2022, which will likely impact appetite, pricing and capacity. New domestic insurers are entering the space, which may help offset any negative impacts.
Q4 Employers Liability/Workers Compensation Summary
Overall (Moderate)
Appetite is strong and competition is increasing in the mid-to-large risk space, especially for well-performing risks. Smaller and/or less favorable risks are experiencing more moderate conditions.
Pricing (Flat)
Competition is fierce for well performing, larger, lighter-hazard risks while other risks are experiencing stable, flat market conditions. Robust underwriting information demonstrating positive actions and performance is important to achieving favorable pricing.
Capacity (Ample) Capacity is sufficient based on existing demand.
Underwriting (Flexible) Appetite is strong and underwriting is flexible, especially for mid-sized and larger risks.
Limits (Flat) Expiring limits can be achieved in most cases.
Deductibles (Flat) Expiring deductibles can be achieved in most cases.
Coverages (Stable) Expiring coverages can be achieved in most cases.
A Look Ahead (Moderate) Current conditions are expected to continue and may become more favorable for larger, well-performing risks as competition continues to increase in this space.
Q4 Property Summary
Overall (Moderate)
The market is stable, and dominated by local insurers. For most industry segments market capacity remains stable, and pricing is decreasing.
Pricing (Down)
Despite several natural catastrophe events, pricing continues to decrease as a result of strong competition.
Capacity (Ample) Capacity is sufficient based on existing demand.
Underwriting (Flexible) Appetite is strong and underwriting is flexible, especially for mid-sized and larger risks.
Limits (Flat) Expiring limits can be achieved in most cases.
Deductibles (Flat) Expiring deductibles can be achieved in most cases with the key exception of risks with adverse loss history.
Coverages (Stable) Coverage is stable, although restrictions related to Infectious Disease and Contingent Business Interruption continue to be mandated in some cases.
A Look Ahead (Moderate) Current conditions are expected to continue and become more favorable for larger, well-performing risks as competition continues to increase.
Q4 Casualty/Liability Summary
Overall (Moderate)
Market conditions remain stable, with flat pricing, sufficient capacity and flexible underwriting practices.
Pricing (Flat)
Pricing is generally flat and decreases can be achieved for favourable risk types.
Capacity (Abundant) Capacity is at or near historically high levels.
Underwriting (Flexible) Local insurers remain flexible while international insurers are more conservative and rigorous – looking carefully at poor performing risk types and risks with overseas exposure.
Limits (Flat) Expiring limits can be achieved in most cases.
Deductibles (Flat) Expiring deductibles – which are typically relatively low – can be achieved in most cases.
Coverages (Stable) Coverages remain stable. Changes are not being imposed across-the-board but some are required on a risk-specific basis.
A Look Ahead (Moderate) Current market conditions are expected to continue.
Q4 Directors and Officers Summary
Overall (Challenging)
Market conditions remain challenging for US listed companies, and appetite and capacity is very limited. In addition, the first China Securities Class Action loss has created a major impact for China domestic public listed companies making market conditions more difficult. Hong Kong listed companies are experiencing more stable market conditions.
Pricing (>+30%)
The pricing environment is challenging, with very significant increases now common.
Capacity (Constrained) Insurers are reducing their capacity or withdrawing from the D&O market completely, leading to significant capacity constraints.
Underwriting (Rigorous) As claims frequency and severity rises, particularly from US listed companies, underwriters have become very conservative and are adhering to underwriting guidelines stringently.
Limits (Decreasing) Limit reductions continue to be imposed by insurers. At the same time, insureds are exploring limit options as a mechanism to help offset rising premium costs.
Deductibles (Increasing) Deductible increases are being imposed by insurers in some cases. At the same time, insureds are exploring deductible options as a mechanism to help offset rising premium costs.
Coverages (Restricting) Side ABC coverage has become increasingly difficult to secure for risks that are changing insurers.
A Look Ahead (Challenging) Current market conditions are expected to continue.
Q4 Products Liability Summary
Overall (Moderate)
The market is stable, with healthy competition, especially following Amazon’s supplier insurance mandate that served to broaden insurer appetite in Products Liability.
Pricing (Flat)
Pricing remains flat as loss experience remains favorable and competition is strong.
Capacity (Ample) Capacity is sufficient for all risks.
Underwriting (Prudent) Local underwriters remain flexible, and appetite is strong for targeted risk types, while underwriters from international insurers are more rigid and rigorous in their risk evaluation, especially related to overseas exposures.
Limits (Flat) Higher-risk exposures are experiencing pressure on limits. In addition, insurers are sub-limiting or otherwise tightening Recall extensions. Other Products Liability limits remain stable.
Deductibles (Flat) Expiring deductibles can be achieved in most cases; however, complex and/or critical products are experiencing deductible increases.
Coverages (Stable) Expiring coverages can be achieved in most cases.
A Look Ahead (Moderate) Current conditions are expected to continue and become more favorable for medium to small risks as market competition strengthens.
Q4 Trade Credit Summary
Overall (Moderate)
While COVID-19 related uncertainty has largely subsided, insurers remain cautious and conservative.
Pricing (Flat)
Pricing has stabilized as the economy recovers from the impacts of COVID-19.
Capacity (Ample) Capacity is sufficient for current market demand.
Underwriting (Prudent) Underwriting remains cautious yet, in some cases, flexible.
Limits (Flat) Expiring limits can be achieved in most cases.
Deductibles (Flat) Expiring deductibles can be achieved in most cases.
Coverages (Stable) Expiring coverages can be achieved in most cases.
A Look Ahead (Stable) Current market conditions are expected to continue.
Japan Market Dynamics
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