Cyber dominates Q1 market challenges; property eases point by point
Cyber and property topped the list of challenging UK insurance markets in the first quarter, with cyber posting the harshest readings across six of seven metrics while property moderated around the edges.
Insurance remained technically a hard market, with six of seven broad segments showing pricing growth, of which five in the moderate pace single digits, Aon's latest “Market Dynamics Outlook” report has shown.
Cyber looks tough by nearly any measure. “Underwriting remained time-consuming and demanding,” authors wrote, “rate increases and capacity reductions continued.”
Cyber rates are said to have suffered “very significant” increases, set in a broad category of over 30%, despite strong continuous upwards moves at all recent renewals.
Cyber capacity is “constrained,” especially at Lloyd's, with insurers still focused on reducing aggregate limits. Limits are down, deductibles are up and underwriting “more rigorous and stringent than ever” with coverage denied to anyone eschewing improved security.
“Current market conditions are expected to continue and may be further challenged depending on the impacts from the geopolitical events in Eastern Europe,” authors claimed.
Property was the UK's second most challenged segment, albeit with some areas of relief over the recent period leaving the greater challenges in select sectors and loss impacted programs. That overall easing of conditions could continue, analysts believe.
“Some insurers have become growth focused which, when coupled with new entrants looking to expand into this area, has helped to drive competition for ‘in appetite’ segments,” authors wrote.
UK property rates are said to have decelerated to single digit growth, capacity is called “ample,” and limits and deductibles “flat” from prior readings.
Elsewhere in the UK insurance space, moderate conditions prevailed, save for declining prices and select easing terms for trade credit insurance, the least challenged UK segment in Q1.
Mark UK casualty/liability for “moderate” conditions as focus has “shifted toward growth, and competition drove a more moderate environment” than to date.
Likewise, UK D&O is called “moderate” with new entrants on the market and existing players “expanding their appetite.” That capacity has yet to lead to increased limits, lower deductibles or more flexible underwriting, analysts noted.
The UK workers’ comp market is “moderate” and “stable” and with few signs of a broader easing of terms.
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