Competitive Global Insurance Market More Buyer-Friendly in Q2: Aon

The global property/casualty insurance market continues to navigate a complex landscape in Q2 2024, with shifting economic conditions and evolving risk factors shaping the industry and pricing and capacity for insurance buyers, according to Aon’s Q2 Global Market Insights report.

“Insurer growth ambitions continued to translate into a competitive, well-capitalized market environment characterized by continued price moderation, underwriting flexibility, and the availability of coverage options, especially for preferred risk types,” Joe Peiser, CEO of commercial risk solutions for Aon, stated in the report.

Wildcards remain natural catastrophe insured loss trends and the potential for a material deterioration in casualty loss trends, which could impact global insurer and reinsurer stability, Aon noted.

“Shocks aside, a capacity-rich market focused on sustainable growth and program stability is good for our clients, many of whom are taking advantage of the current market conditions by restoring coverages and limits that had been reduced during recent renewals,” Peiser observed.

Key Trends in the Global Insurance Market

Competition and growth ambitions are driving buyer-friendly market conditions globally, especially in property insurance, the Aon report noted. The U.S. property insurance market, for example, in Q2 experienced its most favorable conditions since Q3 of 2017, or almost seven years, per the report.

Globally, desirable risks with profitable loss histories are seeing property pricing ranging from single digit increases to low double-digit decreases, Aon reported.

However, global companies with U.S. casualty exposures are facing scrutiny due to reserve deterioration and litigation trends. U.S.-exposed and heavy industry risks are facing rate increases and more restrictive terms, according to the report. In contrast, well-performing risks and those without U.S. exposures are benefiting from healthy competition in casualty as insurers seek growth, Aon reported.

The directors and officers (D&O) liability and cyber insurance markets are characterized by abundant capacity and competition. Some D&O insurers are less inclined to decrease prices, particularly in high excess layers, Aon noted.

“Coverages were generally unchanged, although dialogue around the potential implications of artificial intelligence for directors and officers continued to increase,” the report said.

Despite rising claims, the cyber insurance market remains buyer-friendly with continued savings, especially in high excess layers, Aon reported. Interest in cyber insurance continues to broaden beyond the U.S. and Europe, with growing awareness of cyber incidents and capacity.

In the global cyber market, “systemic risk and privacy exposures remained a key area of focus for insurers, with systemic risks for critical infrastructure, correlated events and war subject to coverage restrictions,” Aon reported.

U.S. Insurance Market Trends

The U.S. insurance market in Q2 2024 remained growth-oriented yet disciplined, with insurer strategies focused on underwriting and pricing for long-term profitability and program stability, Aon reported.

“Flat-to-slightly decreased pricing was available for many targeted and well-performing risks in a well-capitalized, growth-focused market; however, less preferred and challenged risks experienced price increases, although such increases materially decelerated from prior periods,” the report stated.

Preferred and well-performing risks continued to experience an abundance of capacity, and underwriting remained disciplined as insurers sought to maintain profitability across their portfolios.

U.S. Product-Specific Developments

Automobile: The market remains two-tiered, with smaller fleets seeing inflationary increases and some flexibility, while large or challenging fleets face a tougher environment, Aon reported. Risk differentiation and alternative risk transfer programs are key strategies for managing costs and attachment points.

Casualty / Liability: Insurers are focused on sustained profitability amid inflationary pressures and rising settlement values, the report said. The Umbrella and Excess market faces challenges, with insurers making significant portfolio changes, including increased minimum premiums and capacity management.

Cyber: Q2 saw buyer-friendly market conditions, particularly in high excess layers, despite increased claims frequency, Aon reported. Outcomes varied based on business class, improved cyber controls, and previous market adjustments, with expectations of continued favorable conditions due to competition and new capacity.

D&O: Competition remains healthy with abundant capacity, though some D&O insurers resist price decreases in high excess layers, according to the report. Newly public companies benefit from a favorable environment, while persistent risk issues and rising derivative lawsuit settlements continue to impact claims frequency.

Property: Insurer growth goals and prudent underwriting lead to more aggressive, risk-specific pricing, Aon reported. Programs are generally oversubscribed, contributing to favorable pricing and allowing correction of non-concurrency in terms, while more policyholders explore alternative structured property solutions.

To view the full report, including a more detailed look at other regions of the world, visit Aon’s website. &