European Insurance Market Update Q1 2024

Property

The property market is now in a growth stage after several years of hardening with:

• Eagerness for new business, especially towards selected risks and retention, which is a key driver to meet growth ambitions.
• Carriers investing in the mid-market and selecting specific markets with limited natural catastrophe exposure and good loss ratios.
• The large and complex market experiencing a growth in capacity for new and existing insurers. Carriers are more likely to underwrite well managed risks, showing the importance of good risk quality. However, there is still a lack of appetite and less capacity for certain lines such as high natural catastrophe exposed accounts or submissions lacking detailed information.

Casualty

• The casualty market has returned to profit due to the positive effects of remediation. Maintenance of underwriting discipline and risk selection has led to consistent positive underwriting results. However, competition among insurers, driven by a focus on top-line growth, is leading to downward pressure on rates, with some insured's experiencing rate reductions.
• However, for difficult sectors, especially with US exposures and loss impacted renewals, capacity remains limited. Insurers continue to express ongoing concern regarding both economic and social inflation on a global scale.

Financial, Professional and Executive Risks

• The directors’ and officers’ market has continued to soften, and we see no signs of stabilization. However, there is enough capacity in the Western Europe market where most carriers are looking for growth. The financial institutions market has stabilized although rates are beginning to decrease. Additionally, the cyber market is softening which we see is a pattern throughout the region.

Construction

• There is expected deceleration of growth in the construction industry across the region. Output is expected to recover in 2025 but with high interest rates and inflation harming investment.

Marine

• In the interconnected marine market, there is a noticeable softening, particularly in cargo for new business, and to a lesser degree in hull (excluding protection and indemnity). Despite the situation surrounding the Baltimore Bridge incident and the associated claims estimations, markets have shown that they are capable to absorb such catastrophic losses, particularly in the protection and indemnity market.

Crisis Management

• Within the crisis management market, insurers' risk radar has homed in on various geopolitical and socio-economic factors. Hostilities in regions like Ukraine and the Middle East, alongside worsening security conditions in select African and Latin American nations and the political dynamics of the "2024 year of elections," are all shaping shifts in policy terms, conditions, and rates. While there is ample capacity across accident and health, special crime, and terrorism/political violence lines, we're witnessing territorial limitations, reductions in individual line sizes, and premium hikes due to increased claims frequency and heightened security risks.