Continental Europe Q4 2021

Continental Europe Pricing: Property and D&O Lines Continue to Stabilize

Insurance pricing in the fourth quarter of 2021 in Continental Europe (CE) increased 9%, compared to 10% in the third quarter.

Property insurance pricing in CE rose 10%, down from 12% in the third quarter.

• CAT-exposed risks experienced the largest increases, at a slightly reduced level compared to prior quarters.
• Competition for new business increased among European domestic 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 and rates.
• Significant losses in 2021, including fires in Greece and Turkey and European floods, continued to destabilize the market, particularly in affected areas.
• Insurers continued to seek to apply exclusions, particularly for communicable disease and cyber.

Casualty insurance pricing increased 7%, up from 5% in the prior quarter.

• Loss impacted renewals were the most challenging, with insurers looking to restrict capacity.
• Excess casualty and US-exposed placements remained challenging, with clients in most countries experiencing general liability pricing increases in the single digits, though some were as high as 20%.
• Underwriters scrutinized non-core extensions and increased focus on exclusions, particularly for communicable disease, cyber, financial loss, and professional indemnity exposures.
• Auto liability pricing remained generally stable. Clients with large US fleets experienced significant price increases.
• Some clients experienced increases in workers’ compensation, generally due to limited capacity.

Financial and professional lines pricing increased 13%, down from 14% in the third quarter.

• The D&O market continued to be stable, due to increases in insurer competition, appetite, and capacity.
  • Despite outliers with US exposures, certain industry sectors — including life sciences and technology — experienced rate reductions on select programs.
• Pricing increases for FI and professional liability generally ranged from 5% to 20%, depending on risk profile.
• Cyber insurance rates increased by 65%, driven by capacity reductions and ransomware claims.
  • Underwriters required more information at renewal.
  • Self-retentions increased, as did the use of captives.