Continental Europe Q3 2021

Continental Europe: Some Stability in Property and D&O Lines

Insurance pricing in the third quarter of 2021 in Continental Europe (CE) increased 10%.

Property insurance pricing in CE rose 12%.

• Rates generally stabilized, although increases remained common across all sectors, predominantly for CAT-exposed risks, but at a slightly reduced level compared to prior quarters.
• Competition for new business increased among Europeandomestic carriers.
• Insurers continued strict underwriting controls, particularly for large complex multinational clients; those with a better loss history or that demonstrated good risk mitigation controls attracted more favorable terms.
• The significant losses experienced during 2021, such as the European floods, are likely to destabilize the market in the near term, particularly in affected areas.
• Changes in wordings and an aggressive approach by carriers remained a challenge as they sought to apply exclusions, particularly for communicable disease and cyber.

Casualty insurance pricing increased 5%, the ninth consecutive quarterly increase.

• Excess casualty and US-exposed placements continued to be the most challenging sectors.
• Most countries in the region experienced general liability pricing increases in the single digits, but some as high as 20%.
• Some insurers expressed particular concerns around social inflation and US auto exposure; auto pricing remained generally stable.
• Some clients experienced increases in workers’ compensation, ngenerally due to limited capacity.

Financial and professional lines pricing increased 14%.

• There was some stability in the D&O market in the quarter, driven by increases in insurer competition and capacity. However, major D&O programs in distressed sectors or with US exposures continued to affect pricing, with sizeable rates increases.
• Average pricing increases for FI and professional liability generally ranged from 5% to above 20% across the region.
• Sizeable rate increases continued for cyber insurance, with carriers reducing exposure and increasing rates by 60% and greater, a trend expected to continue for the remainder of 2021.