Expect a more consistent shift towards firming market conditions, is the message broking giant Aon Plc is sending out to commercial insurance buyers in Europe. In the UK, in particular, Aon has identified three lines of business that are seeing rate increases above 10% amid potentially contracting capacity.
Publishing an insurance market heat map, Aon examined the impact of shifting market conditions as well as the implications for insurance buyers in 13 European countries and eight lines of business.
According to the heat map seen by Insurance Business, there’s not much trouble in Switzerland plus Scandinavian countries Finland, Norway, Sweden, and Denmark where capacity is generally available with rates either down, flat, or firming 5-10% in certain lines.
Meanwhile the rest of the line-up have at least one business line being impacted heavily by the changing commercial insurance market. The areas of concern are facing the increased likelihood of underwriting referrals and a detailed review of cover, limits, and deductibles.
In the UK, these business lines are directors’ and officers’ (D&O), marine cargo, and professional indemnity (PI); Germany – cyber as well as property & business interruption (PBI); the Netherlands – D&O, motor fleet, PI, and PBI; Belgium – general liability; France – motor fleet ; Italy – PBI; Spain – motor fleet; and Portugal – PI.
“As the market becomes more selective, buyers need to be proactive around the renewal process and improve the marketability of their risk profile,” commented Richard Waterer, managing director for Europe, the Middle East, and Africa (EMEA) at Aon’s Risk Consulting practice.
“Businesses need to focus on developing stronger risk management programmes, identifying areas where claims can be managed and reduced, and increasing collaboration between the insurance buying function and their broader enterprise risk management team.”
For chief broking officer EMEA Hugo Wegbrans, how the industry responds to the changing market is critical. He said buyers need to rethink their approach to ensure that there is an increased exchange of information between parties throughout the year to avoid “surprises” at the time of renewal.
Waterer added: “Through working with their broker to ensure that insurer relationships are strong and risk data is robust, as well as considering alternative risk financing, such as the use of captives, businesses will be better prepared to navigate the impact of a changing market.”