Re/insurance broker Aon has observed that the North American property market remains challenging, but notes that conditions are moderating as rate increases decelerate and the sector begins to approach equilibrium.
Against this backdrop, analysts believe that insurers will be looking to increasingly regain share of classes of business deemed profitable, and to focus on growth again.
However, risks with losses or which are heavily catastrophe exposed or in difficult occupancies such as food and habitational frame real estate continue to experience difficult conditions.
And while options continue to be sought to help manage costs, most placements are being renewed at the same limits and deductibles as expiring.
As property pricing returns to profitable levels, capacity continues to slowly and steadily increase, even as insurers limit their exposure and focus on loss occurrence definitions.
What’s more, Aon notes that large loss activity, particularly from severe weather, continues to be a major concern, especially following the unprecedented Texas Freeze in Q1 and the high level of Q2 convective storm activity, and in light of predictions for an active hurricane season for 2021.
Turning to casualty and liability business, Aon highlights that coverage negotiations continue to be challenging, with underwriters particularly restrictive on wordings related to communicable disease and pandemic.
Despite this, market conditions are expected to continue to improve in the second half of the year as new capacity markets seek to expand to take advantage of pricing levels.
Meanwhile, for cyber business, insurer aggregation concerns are a common theme, and many insurers are now deploying less limit.
Here, underwriting scrutiny is also high and supplemental applications are the norm, with a focus on profitability over top line growth. Rate increases are significant, and many insureds are working to manage budgets.
In response to these challenges, Aon asserts that traditional broking has become more innovative and symbiotic, with experts now collaborating across risk, consulting, actuarial, reinsurance, health, retirement, and investments to support risk assessment and quantification, risk financing decisions, captive feasibility evaluation, and exploration of alternative capital.