London Market leaders call out for more of everything, unless its North American property
London Market insurers claim heavy appetite for 2022 across nearly all business lines, but with rising caveat for some North American cat-exposed property, Howden's annual London Market Appetite Survey has shown.
"Given the compounded rate environment that 2022 will bring, growth ambitions are buoyant across the market with very few contractions or withdrawals and most insurers looking to at least track rate or preferably grow beyond," report authors Paul Cumberland and Julia Hitchcock of Howden Markets said.
But appetite need not match the "underwriter reality" and the market may prove a mismatch to appetite line by line. "Of course it remains to be seen whether the C-suite positioning will be met by line underwriter reality," authors warned.
North American property exposures are falling out of favor, a reflection of "above average cat losses in 2021, increasing uncertainty driven by climate change and a waning faith in the integrity of the catastrophe models." The segment ranked 46th out of 51 surveyed business lines with an appetite reading only fractionally above what rate gains alone would point to. Only one insurer spoke to a hope for increasing exposure.
Cyber is also suffering somewhat curbed appetite. Cyber should take the single largest rate increases amongst business lines, survey panelists say, but few save for hardened veterans of the business are ready for increased exposures beyond what rate delivers.
Risk adjusted rate gains across the market should slow to a 6.7% pace in 2022 from 12.7% seen in 2021 (itself above the 10.8% forecast in the prior year survey), data showed.
The relatively new market segment of sustainable or renewable energy is enjoying a boon of interest at a level Howden considers "disproportionate to the anticipated rate change."
Howden's annual London Market Appetite Survey was run among C-suite participants from 38 insurers, including 24 Lloyd's syndicates during November and December 2021.
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