In their Q423 Market Insights Outlook for Europe, the Middle East and Africa (EMEA), Aon has highlighted how inflation continued to pressure pricing amidst generally moderate market conditions, although natural catastrophe exposed property and otherwise challenging risk types, including life science, chemicals, automotive parts, and mining risks, experienced a more difficult market environment.
According to the firm, social inflation continued to impact casualty pricing for risks around the globe, but this was most prominent for US exposed risks.
Moreover, overall market pricing was flat but is said to have varied widely by risk and product. Nat cat -exposed and otherwise challenging risk types experienced the most significant price increases, while cyber pricing softened, Aon noted.
Aon made it very clear that in EMEA, pricing varied considerably across products and segments, with pricing uncertainty continuing to remain the key topic of conversation.
Interestingly, Aon stated, that while capacity was generally sufficient in Q4, appetite for middle market and poor performing risks was limited.
Capacity reportedly increased in the Middle East as a result of international insurers’ growing interest across the region.
Moving forward, corporate responsibility concerns continued to gain importance in underwriting, which remained generally disciplined but was more flexible for cyber and financial Lines placements.
Aon particularly highlighted how the scrutiny of property exposures further strengthened amid ongoing nat cat concerns, especially following the flooding events that took place in Italy earlier in the year.
If you recall, torrential rainfall and flooding severely affected the regions of Emilia-Romagna and Marche in Italy in May last year.
Additionally, Aon noted that expiring limits were achieved on most placements in Q4, with increases available on some risks; especially, Cyber and Directors & Officers (D&O) placements, as insureds reinvested their premium savings in programme enhancements.
As well as this, expiring deductibles were achieved on most placements too, with decreases available on some risks; especially, Cyber and (D&O) placements as insureds reinvested their premium savings in programme enhancements.
As for coverages, most placements reportedly renewed with expiring coverage terms and conditions, including exclusions for per-and polyfluoroalkyl substances (PFAS) and war.
South Africa risks experienced coverage limitations, especially on Property and Liability placements, Aon noted.
