Continental Europe Pricing Q3 2022

Cyber insurance shows signs of stabilizing

Insurance pricing in the third quarter of 2022 in Continental Europe (CE) increased 6%, the same rate of increase as in the prior two quarters

Property insurance pricing in CE rose 5%, compared to 6% in the second quarter.

• Insurer appetite increased as the overall rating environment improved.
• There was increased interest from insurers to offer long-term agreements.
• Conditions continued to depend on loss experience and risk quality.
  • Specific industries and risks found it more challenging to find capacity due to more restrictive underwriting guidelines.
• Strict underwriting controls continued and insurers remained disciplined with respect to capacity deployment and aggregation, especially for contingent business interruption extensions.
• Territorial exclusions continued for Ukraine, Belarus, and Russia.

Casualty insurance pricing increased 7%, the same as in the prior quarter and the thirteenth consecutive quarter of increases.

• There was a continued reduction in capacity from key primary insurers.
• Insurers increased pricing levels due to perceived inadequacy for risks with US exposure, or those in complex industries.
• Excess casualty and US-exposed placements continued to be challenging, with general liability risk experiencing double-digit increases in several countries.
• Some insurers reconsidered risk appetite, at times resulting in price increases or withdrawal of capacity, which particularly affected renewals with losses and in challenging sectors.
• Insurers’ concerns continued regarding social and general inflation on US auto exposures, with significant price increases typical for clients with large US auto fleets.
• Underwriter scrutiny continued for non-core extensions, such as product recall and medical malpractice.

Financial and professional lines pricing rose 6% in the third quarter.

• Stability continued for D&O liability pricing due to increased capacity and competition from insurers; pricing remained generally flat to low-single digit increases.
  • Some primary insurers offered long-term agreements.
  • Competition was seen across all program layers.
  • Environmental, social, and governance (ESG) risk profiles continued to receive increased underwriter scrutiny.
• For FIs, rate increases continued to moderate, and some clients experienced moderate reductions.
• Crime renewal terms continued to stabilize.

Cyber insurance pricing increased 40%, compared to 50% in the second quarter, as new capacity entered the market.

• Insurers continued to seek to increase retentions in many instances.
• Underwriters continued to require detailed information on cyber risk controls, particularly regarding ransomware.
• Insurer concerns continued around systemic exposures and accumulation risk.