TORONTO, Feb. 9, 2022 /CNW/ -- Aon plc (NYSE: AON), a
leading global professional services firm, has released its
quarterly Global Market Insights Report, which provides data-driven
insights and analytics on risk and insurance market trends around
the world to enable better decision making.
Aon's report for the fourth quarter of 2021 emphasizes how new
forms of volatility are impacting insurance market trends and the
risk agenda for organizations, driving the growing need to innovate
and develop solutions to assess, quantify and treat emerging risks
profiles. Fourth-quarter 2021 highlights for Canada include:
- Casualty/Liability: The primary market is stable as
insurers focus on profitable growth. Well-performing, non-U.S.
exposed risks are experiencing single-digit rate increases. The
excess market is challenged in high exposed classes, impacting
renewals and new capacity requirements. While U.S. litigation
trends and rising loss costs play an important role in pricing,
facultative reinsurance rates, capacity and conditions are also
important factors.
- Cyber: Market conditions remain challenging. Controls
and loss experience are the primary drivers of pricing and terms. A
lack of proper actuarial modelling from the outset of the cyber
marketplace has led to historic under-pricing; as more claims are
paid by insurers, better claims data is developed, which is leading
to more accurate models reflecting higher pricing.
- Property: Signs of stabilization are emerging. Some rate
pressure and capacity issues continue, however, particularly for
complex and/or natural catastrophe-exposed risks. Well-performing
risks are experiencing modest rate increases.
- Directors and Officers: Profitability issues, combined
with ongoing concerns related to the impacts of COVID-19 on some
sectors, continue to create a challenging market environment. There
is a heightened focus on the ability of companies to deliver on
their Environmental, Social and Governance (ESG) commitments.
Canadian market trends are lagging behind the U.S. trends, with
2022 expected to be the third year of rate increases in
Canada.
"The Canadian insurance market will continue to climb out of the
hard market in 2022," said Russell
Quilley, chief broking officer for Canada at Aon. "With many of the
insurance carriers looking to grow in 2022, this additional
pressure will translate to more favourable terms for clients."
Global highlights include:
- While uncertainty from the COVID-19 pandemic was a key driver
of price increases, conservative underwriting and capacity
constraints, it has largely subsided, and volatility has stabilized
- with the most notable exception being cyber products. The
recovery in certain economies, industries and organizations
continues. For example, among C-suite leaders and senior executives
across several industries surveyed in September 2021, nearly 90 percent in North America and Europe expected business conditions to be
stronger in a year.
- The cyber landscape is becoming increasingly complex and
volatile, with frequency and severity of loss events continuing to
challenge clients and insurers. Market conditions remain difficult,
with rigorous underwriting along with significant rate and
deductible increases. In Aon's 2021 Global Risk Management Survey,
cyber risk topped the list as the number one current and predicted
future risk globally and was in the top 10 list of risks across
surveyed regions, industries and respondent types.
- Insurer profitability, strained by loss frequency and severity
as well as a prolonged low interest rate environment, is
strengthening in some key market segments, leading to changes in
risk appetite and deductibles and a shift in focus from portfolio
remediation toward profitable growth.
- There is a growing trend among insurers to reduce maximum
limits, leading to more layers or coinsurance per placement. The
sub-limits for high-hazard risks are under pressure. Deductibles
have stabilized as mandates have been applied, although further
adjustments are expected in certain pockets where underwriting
performance remains strained.
- New capacity has entered the market and is being deployed
strategically, with a focus on minimizing volatility.
- Following the exclusionary language modifications that were
imposed on recent renewals, coverage has now stabilized across most
lines. Climate change and sustainability are also areas to watch in
terms of coverage.
- Environmental, Social and Governance (ESG) risks continue to
increase in importance for insurers as well as in their evaluation
of clients and business partners. Though considered an underrated
risk in Aon's Global Risk Management Survey, ESG is predicted to
enter the top 15 risks globally in the next three years.
The report shows the interconnectivity of emerging and
established risks, and how businesses are navigating new forms of
volatility amid heightened uncertainty. Aon's Global Market
Insights includes analysis of market dynamics across products and
geographies as well as actionable insight on how organizations can
use the information to inform better decisions.
To access Aon's fourth-quarter 2021 Global Market Insights,
please click here.
About Aon
Aon plc (NYSE: AON) exists to shape
decisions for the better — to protect and enrich the lives of
people around the world. Our colleagues provide our clients in over
120 countries with advice and solutions that give them the clarity
and confidence to make better decisions to protect and grow their
business.
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Media Contact
Alexandre
Daudelin
+1 514 967-9330
SOURCE Aon plc