Geography Trends Q4 EMEA and the UK

Iberia

Market Dynamics

Q4 Automobile Summary

Overall (Moderate)

The decrease in activity due to COVID-19 related restrictions led to strong performance in the Auto market, allowing insurers to recover from poor performance in prior years. As restrictions have eased throughout 2021, losses have shifted toward historical averages but market conditions remain moderate-to-favorable.

Pricing (+1-10%)

Most risks renewing in Q4 experienced modest rate increases while some well-performing risks in favorable sectors experienced flat renewal pricing.

Capacity (Ample) Insurer appetite has expanded and additional capacity has come into the market. Existing capacity is sufficient for most risks.

Underwriting (Prudent) Insurers are requiring extensive, detailed underwriting information, but are demonstrating flexibility in terms of capacity and appetite for risks they deem favorable.

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 market conditions are expected to continue.

Q4 Cyber Summary

Overall (Challenging)

As risk complexity grows and losses escalate, market conditions are challenging, with significant price increases, rigorous and rigid underwriting, and constrained capacity.

Pricing (>+30%)

Significant rate increases continue, driven by increased risk complexity and volatility, and escalating loss frequency and severity.

Capacity (Constrained) Appetite is focused and capacity is constrained.

Underwriting (Rigorous) Underwriting is stringent and rigorous, with extensive, detailed information required. Cybersecurity controls are under scrutiny.

Limits (Flat) Expiring limits can be achieved in most cases.

Deductibles (Increasing) Deductible increases are being imposed, driven by growing loss frequency and severity.

Coverages (Restricting) Coverage restrictions are being imposed, especially for challenging risk types such as ransomware, business interruption, systemic risks, war, and biometrics.

A Look Ahead (Challenging) Current market conditions are expected to continue.

Q4 Employers Liability/Workers Compensation Summary

Overall (Challenging)

Following a prolonged period of poor portfolio performance, insurers are now remediating through increased pricing and rigorous underwriting. Appetite remains generally consistent and there is more than enough capacity for current demand.

Pricing (+1-10%)

Price increases have become the norm, even for well-performing risks.

Capacity (Abundant) Capacity is abundant based on current demand.

Underwriting (Rigorous) Recognizing potential long-term impacts on insurers' technical results, underwriting is increasingly rigorous and rigid.

Limits (Flat) Limits are compulsory and stable.

Coverages (Stable) Coverage is statutorily determined and stable.

A Look Ahead (Challenging) Existing market conditions are expected to continue.

Q4 Trade Credit Summary

Overall (Soft)

Soft market conditions are being experienced nearly across-the-board, as a result of favorable loss ratios and insurer growth focus.

Pricing (Down)

Favorable loss ratios have led to healthy appetite and competition, pressuring rates downward.

Capacity (Ample) Capacity is sufficient for the existing market demand.

Underwriting (Flexible) Underwriting is flexible and accommodating as insurers focus on growth.

Limits (Increasing) Limits are increasing as requested to accommodate growing exposures/needs.

Deductibles (Decreasing) Deductibles can generally be reduced on request.

Coverages (Broadening) Broad coverage terms can be achieved.

A Look Ahead (Soft) Current market conditions are expected to continue, although the market is cautiously watching the pricing of raw materials and energy as changes could have an impact on risk performance.

Q4 Casualty/Liability Summary

Overall (Challenging)

Capacity and profitability challenges remain, with the greatest impacts experienced by automotive, pharmaceuticals and rail risks, as well as risks with US exposure / activities.

Pricing (+1-10%)

Well-performing risks are generally renewing flat while other risks are experiencing modest increases.

Capacity (Constrained) Capacity has contracted throughout 2021 and is now constrained.

Underwriting (Prudent) Underwriters remain sensible but have become less flexible on coverage terms and more rigorous in their information requests and underwriting approaches.

Limits (Flat) While full tower limits can be achieved, coinsurance and/or more layers are needed to complete placements.

Deductibles (Increasing) Deductible increases have become common, particularly for product guarantees and US exposure.

Coverages (Restricting) Coverage restrictions – especially related to US-exposed risk, as well as rail and pharmaceuticals risks – are being imposed.

A Look Ahead (Challenging) Current market conditions are expected to continue.

Q4 Directors and Officers Summary

Overall (Challenging)

The market remains challenging as uncertainty continues regarding the financial health of many companies, and claims complexity, particularly related to insolvency, continues.

Pricing (+11-30%)

Significant price increases remain the norm; however, there has been a slight deceleration.

Capacity (Constrained) Capacity is generally constrained; however, some insurers are offering additional capacity in high excess layers or Side A only.

Underwriting (Rigorous) Underwriting is rigorous, with special emphasis on the analysis of financial information and multinational risk exposure.

Limits (Flat) Expiring limits can be achieved in most cases.

Deductibles (Increasing) Reimbursement Deductibles (Side B) and Securities Claims Deductible (Side C) are under pressure, especially related to US-exposed risks.

Coverages (Restricting) Coverage is limited for insolvency/lack of patrimonial support, if financial results are not optimal. Additionally, international coverage / financial interest clauses, affirmative coverage, and cyber conditions are under pressure.

A Look Ahead (Challenging) Market conditions will remain difficult in 2022, particularly in the primary layer, but may further stabilize in the higher excess layers. Regulatory changes related to bankruptcies may drive further market changes.

Q4 Property Summary

Overall (Challenging)

The market is challenging, especially for risks in the food, waste, and chemicals sectors, as well as natural catastrophe-exposed risks. Robust underwriting information is key to attract markets and secure the best results.

Pricing (+11-30%)

Price increases have stabilized for some risks but remain significant for poor performing risk types and geographies, natural catastrophe-exposed risks, and industries with adverse experience such as food, waste, wood, pulp & paper, and chemical.

Capacity (Ample) Capacity is generally sufficient, with the exception of poor-performing risk types, which are experiencing notable constraints.

Underwriting (Prudent) Appetite is expanding and there are now more options for lead placements. Underwriters strongly favor risks with robust, detailed risk information.

Limits (Flat) Most placements are renewing at expiring limits; underwriters are not requiring decreases and insureds are not leveraging reductions as a premium management tool as the associated premium savings is deemed incommensurate with the level of additional risk.

Deductibles (Increasing) Deductible options are being explored by insureds as a mechanism to help offset rate increases. Analysis of the total cost of risk, as well as risk financing options, have become important tools as insureds explore ways to manage costs. In addition, captive cells have gained traction.

Coverages (Stable) Following coverage restrictions that were imposed on recent renewals, coverage has now stabilized.

A Look Ahead (Moderate) Rates are expected to continue to stabilize, with the exception of natural catastrophe-exposed risks and poor performing risk types.

Italy Market Dynamics

©2022 Aon plc. All rights reserved | Contact Us | Privacy Policy | Legal