In our Q3 2023 series you will hear from a range of WTW experts who will share with you their deep and broad understanding of the latest market conditions to provide you with actionable insights.
In the latest quarterly global marketplace update video, Hugo Wegbrans, Global Head of Broking, reflects on the improving half year results reported by many insurers and the drivers of premium trends we’re seeing in the current market.
With the half year reporting season now complete, what we have seen is that many insurers’ loss ratios are far healthier than they have been for some time. Does that mean our clients can expect to see their premiums stabilizing? Certainly, we do see premiums stabilizing, but the true answer is – it depends.
Four factors in particular remain of concern to insurers:
Natural catastrophe losses
Although it’s been a relatively benign cat season so far in the traditional hot spots, global catastrophe events of recent months are having a significant impact on insurers. In property lines in particular, we see that premium trends are highly sensitive to relative potential exposures to cat events.
Across casualty lines, the rise in ‘nuclear verdicts’, linked in part to the growth in the availability of litigation financing, is troubling for insurers.
While flattening, insurers are still wary of being caught out by its effects.
Reinsurance premium uncertainty
A sense of potential further rises in reinsurance costs for 1 January renewals despite last year’s significant increases.
On a positive note, we continue to see evidence of insurers targeting growth in their preferred lines of business and geographies. And with that, many insurers are giving their underwriters more freedom to do individual deals rather than sticking to a strict portfolio driven approach that the pandemic and surging inflation had largely dictated.
For further insights into the implications for individual lines of business and geographies, please take a look at our quarterly video series below.
Please note the observations in the Global Marketplace Insights Spotlight video series are based on our experience with WTW clients and trends across the global markets, but they are not a whole market study.