UK Insurance Market Sectors Stabilizing – Aon

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UK Insurance Market Sectors Stabilizing – Aon

According to Aon’s most recent Q2 Market Dynamics Outlook, the United Kingdom is keeping an eye on its more moderate markets.

According to the company, after prior underwriting modifications, improved insurer results, and a focus on expansion, the property market continued to stabilize in Q2. While price changes continued to go up, it was stated that the rate of increase reduced.

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It wrote: “Property market conditions are expected to continue to stabilise in Q3, driven by growth plans from incumbent insurers and from new capital entering the market. The opposing force is inflationary pressure, which may in turn put pressure on pricing. Loss-impacted risk types will remain challenged. Maintaining proactive market engagement and addressing the information demands of insurers will remain critical to achieving superior outcomes.”

UK Insurance Market Sectors Stabilizing – Aon

While Aon acknowledged that the real estate market had improved, it continued to face difficulties in areas like food, pulp and paper, heavy industrial, and loss-impacted risks.

With the notable exception of higher-risk industries, loss-impacted programs, or situations where risk management and progression were not obvious, it was stated that improved insurer performance has attracted new capital and served to soften property market conditions for the majority of risks.

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It added: “Market improvements have been somewhat dampened; however, by reinsurance price increases, a continued elevation of supply chain risk, and increased climate risk. In addition, valuation scrutiny continued, with impacts on capacity, coverage sub-limits, and pricing. The predicted high-impact hurricane season has accelerated the pace of innovation related to catastrophe management tools (e.g., satellite imagery and the use of Synthetic Aperture Radar).”

UK Insurance Market Sectors Stabilizing – Aon

With regard to casualty and liability, it indicated a calming of market circumstances and a slowing of the rate of rises. It stated that while inflation was and would continue to be a major concern, insurer expansion aspirations will foster healthy market competitiveness.

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However, it added: “These impacts may be tempered by inflationary pressures and resultant rising claims costs, as well as continued uncertainty related to the geopolitical events in Eastern Europe.”

Aon said that on a global perspective with casualty and liability, market conditions were generally stable, but pricing and capacity varied by industry, exposure type, and attachment point.

It added: “Social inflation and nuclear verdicts continued to impact underwriting and pricing strategies, as well as loss development. Key underwriting concerns were per- and polyfluoroalkyl substances, wildfire, sexual abuse, and climate change.”

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