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Q3 Global Marketplace Insights – Europe

2023 Market Insights

October 17, 2023

Nicoletta Cossutta, Head of Broking Europe, discusses the market dynamics in Europe from a capacity and pricing perspective.
Europe insurance marketplace update

Hear from our experts and learn more about the latest insurance marketplace trends


Europe insurance marketplace update

Welcome to WTW's Global Marketplace Insights series, where our experts bring you the latest risk and insurance perspectives.

Welcome back to the WTW Market Update series.

My name is Nicoletta Cossutta and I am Head of Broking for Europe and this time I'm pleased to cover major changes and trends seen after the 1st of July renewal and throughout the current year in the European insurance market.

Generally speaking, this month has been a period of stabilization for the commercial lines insurance market.

We understand this trend will continue throughout the remaining months of the year and most likely still into 2024.

Nevertheless, a close look to the insurance market should be maintained.

As the insurance renewals will be key to determine any major changes that could impact the outlook for board, international and local insurance company and therefore impact our clients.

We continue to in what we call a stable hardened market where placement with a focus, broadest strategy and good data quality can be managed as expected and therefore with no major surprises for our clients.

In fact, for most lines and clients there is still enough capacity in the continental market for our broken teams to place the risk thanks to a mix of local or European well established insurers as well as a newer international players. When looking at the different lines of business and products.

The key message I would to transmit for the property market for instance is that it has been less stressed and we even seen some minor discount in certain quality for high quality and well managed risk.

Capacity, although like it's still like somehow challenging for certain risk of sector with focus on catastrophe exposure not only the US but also in Europe.

CBI understanding the supply chain, SRCC and loss leading account.

As an outlook, the current ongoing Monte Carlo at then the coming convention as well as in the US Nat-Cat season will be key to determine how Q4-Q1 sentiment in the market will look like.

Casualty instead has finally returned to profit for the first time in five years as insurers are feeling the positive effect of remediation.

Therefore there is an increase like underwriting discipline and risk selection leading to positive underwriting result.

This in turn is leading to increases in capacity and therefore competition.

Insurers are increasingly focused on the top line growth which is leading to downward pressure on grades with some insured experiencing a rate reduction as well.

However, for difficult sector especially like we have US exposure and loss impacted renewal capacity remain limited. Continue treaty uncertainty, adverse prior year loss development and persistent economic and social inflation resulting in continue and the right caution.

Looking ahead to year end, we do not expect any dramatic changes with potential continuing easing of pricing on well managed risk where competition can be generated.

In general, buyers are in much better position now with greater stability and choice.

Turning into financial lines, I would like to flag the D&O market is continuing softening and that we see an influx of capacity.

Whereas for other products such as cyber, PI, FI, the capacity and appetite from the market varies a lot depending on the countries where the risk are located, the industry and even the segment of the clients large and complex middle market or SME. Global and European merger and acquisition sector declined in the first half of 2023 as interest rate increases and economic uncertainty impacted financing.

According to our quarterly year performance monitor.

Expect the same trying to continue toward the ends of the year toward the end of this year while waiting for changes on the monetary policy globally.

In construction, whereas across the region we still encounter economic and political pressure impacting general cost escalation due to inflation, higher prices and pressure on supply change as well as specialized labor force with some sectors in contraction public set to spending in infrastructure investment in the energy and data sector remain key activity drivers as reported in the last review published by our construction team which I strongly recommend you to review.

We continue to see reports of stabilization for the region but not on a consistent basis.

It's like increases in construction or risk and more notably in professional indemnity PI and inherent defects, IDI notice in most geography.

The natural resources industries, capacity in there remains stable for our market, insurers continue to focus on adequacy of asset valuation and we see a potential reduction in Nat-Cat capacity for power risk, but no sign on any major insurer withdrawal from this class.

Trade credit market, instead insurers remain selective on buyers will lower financial rating and uncertain sector with higher claims levels such as the construction of the retail sector.

Expect credit appetite to continue to tighten until the end of 2023 given the resection of serving several European countries and a continued increase in the interest rate and more limited access to liquidity for European company.

Overall, though as you I'm sure like you will hear also from my colleagues from the other regions, the insurance agency continue to be attracted to capital and it continues to be a clear trend for carriers to expand their operation beyond their main original markets such as the UK and the US into a more international presence especially within Continental Europe which certainly will let ease market condition for some of the lines in the near to medium term.

Continue to remark that the quality of submission and clarity of placement strategy are key to success in this with capacity for several industry and Cat appetite being unpredictable and potentially volatile.

My advice to you as clients is to approach your brokers as early as possible.

Given that although we can cope with changes in market condition, late and uncertain renewal are frustrating for all parties involved.

And critical to successful renewal will be your broker support in considering new ways to achieve your objective, percuss through our risk and a leading range of solution as well as alternative risk transfer.

And last but definitely not least, we will continue like our effort to keep you as updated as possible both with this series of market update videos that we are planning like to publish on a regular basis, but also with our printed market reports updates.

Please reach out to your local broking teams or to me directly to help you navigate these circumstances throughout the end of the year in order to make sure that we can bring to you all of our WTW global expertise to find the best solution that can fit like your needs.

Thank you.


Nicoletta Cossutta
Head of Broking & Strategic Initiatives, CRB Europe
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