Asia Pricing Q4 2022

Cyber pricing continues to moderate

Insurance pricing in the fourth quarter in Asia increased 2%, the same as in in the prior quarter.

Property insurance pricing rose 2%, the same as in the third quarter.

• Due to continued concerns regarding inflation, insurers maintained focus on updated and validated valuations of assets and business interruption calculations.
• Underwriters continued to focus on CAT and secondary CAT perils.
• Renewal results again favored clients with exemplary claims performance and strong risk management practices.

Casualty insurance pricing declined 1% in the fourth quarter.

• Casualty pricing in Asia decreased in the fourth quarter for most industry segments; however, some experienced tightening of terms and conditions.
• The market remained challenging for product recall and US-exposed product liability, with capacity being secured from London subject to its pricing and conditions requirements.
• Auto liability and workers’ compensation renewals experienced decreased pricing in a number of territories, and held stable in others.
• Insurers continued to demonstrate caution due to claims inflation resulting from litigation trends and material cost increases.
• Insurers continued to focus on updating policy wordings, ensuring the application of updated sanctions clauses and exclusions associated with per- and polyfluoroalkyl substances (PFAS), cyber, terrorism, punitive damages, and contractual liability.

Financial and professional lines pricing increased 2%, compared to 5% in the prior quarter.

• D&O rates began to stabilize, with non-US-exposed businesses experiencing decreases of up to 10%.
• Additional capacity entered the market; combined with 2022’s low level of IPOs, SPACs, and deSPACs, this generated strong competition on traditional risks.
• Pricing began to moderate for FIs and was considered stable for large and complex accounts.

Cyber insurance pricing increased 22%, an improvement from recent quarters.

• Conditions in the cyber market continued to improve as new entrants drove an increase in capacity, markets actively indicated a desire to grow their portfolios, and many clients were able to eliminate sub-limit and coinsurance requirements around ransomware (usually for an additional premium).
• Clients in specific industries remained vulnerable to wholesale insurer appetite changes to their industry.
  • Due to claims activity, telecommunication clients experienced a pullback in appetite for cyber and tech E&O risk, resulting in pricing increases above average.