Aon claims Q1 2023 saw most complex Q1 renewals for decades
The January 1st treaty renewals were the most delayed, complex and difficult in decades, according to Aon’s Q1 2023 Global Market Insights Report.
According to Aon the renewals were hit by a confluence of events and conditions, including stubborn inflation (exacerbated by the events in Eastern Europe), a challenging 2022 storm season, ongoing climate change concerns, and pressure from investors to improve portfolio performance
This introduced significant volatility into the market, especially for Natural Catastrophe exposed Property risks and Specialty risks impacted by war and inflation Aon said. The market for such risks was characterized by significant price increases, reduced capacity availability, and modified coverage terms and conditions, particularly around valuations.
The report said that while the market environment was challenging for Natural Catastrophe Property, as well as higher-risk sectors and occupancies, US-exposed risks (on non-US placements), and risks with adverse claims experience, insurers continued to expand their appetite and compete to retain and grow their portfolios in targeted areas where rates were viewed as adequate, and the scope of coverages had been clarified.
It added: “Most notably, the Directors & Officers market experienced a continued moderation – with abundant capacity and price decreases available in some major markets – and Cyber market headwinds continued to subside.”
Amidst the backdrop of recent bank failures, and evolving regulatory scrutiny on the banking sector, according to Aon management liability and financial lines insurers reassessed their exposure to banks and depositors overly exposed to vulnerable banks. Regional US banks experienced rate and retention increases, and insurers signalled more disciplined underwriting and further capacity assessments.