Asia Insurance Pricing Q4 2022

Global Insurance Market Update

Global commercial insurance prices rose 4% in the fourth quarter of 2022, compared to 6% in the third quarter. Asia experienced a 2% increase in composite pricing, compared to 2% in the third quarter.
Taiwan, Vietnam and Thailand experienced the highest price increases (+15%, +6.6% and +2.7% respectively), while Malaysia saw a -5.1% decrease compared to the prior quarter.

Full insights can be found in the Asia report.

Reinsurance treaty renewals on January 1 were challenging as insurers — domestic and international — were impacted by rising costs, increased retentions, and coverage restrictions. There is an expectation that insurers will pass on these impacts to clients.

Singapore and Indonesia experienced highest price decreases (-3.8% and -2.9% respectively) compared to the prior quarter.
Some segments saw some tightening of terms and conditions. Insurers remained cautious due to claims inflation resulting from litigation trends, as well as rising materials costs.

Singapore, Philippines and Malaysia experienced the highest price decreases (-11.5%, -5.7% and -5% respectively), while Hong Kong saw a 3.8% increase compared to the prior quarter.
Directors and officers (D&O) liability pricing stabilized in the fourth quarter; non-US-exposed business experienced decreases of up to 10%.

Taiwan, Singapore and Thailand experienced highest price increases (+35%, +30% and +27.5% respectively).
Cyber insurance stabilization was also indicated by new market entrants and capacity, insurers indicating a desire to increase business, and the ability to eliminate sub-limits and coinsurance requirements around ransomware (usually for an additional premium).

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 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.

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.

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.