Aon's Global Market Insights Report
Q1 2023

Our latest Global Market Insights Report dives into the macro events that impacted the insurance market in the first quarter of 2023 and highlights trends across pricing, capacity, underwriting, limits, deductibles and coverages. It also examines the risk and insurance market trends and solutions that banks, and bank customers, will need to consider to navigate this period of volatility and highlights how parametric insurance solutions are simplifying risk transfer.

Key trends within the report include:

• Precipitated by a confluence of events and conditions, including stubborn inflation (exacerbated by the events in Eastern Europe), a challenging 2022 storm season, ongoing climate change concerns, and pressure from investors to improve portfolio performance, the January 1st treaty renewals were the most delayed, complex and difficult in decades, introducing significant volatility into the market – especially for Natural Catastrophe exposed Property risks and Specialty risks impacted by war and inflation. The market for such risks was characterized by significant price increases, reduced capacity availability, and modified coverage terms and conditions, particularly around valuations.
• While the market environment was challenging for Natural Catastrophe Property, as well as higher-risk sectors and occupancies, US-exposed risks (on non-US placements), and risks with adverse claims experience, insurers continued to expand their appetite and compete to retain and grow their portfolios in targeted areas where rates were viewed as adequate, and the scope of coverages had been clarified. Most notably, the Directors & Officers market experienced a continued moderation – with abundant capacity and price decreases available in some major markets, and Cyber market headwinds continued to subside.
• Amidst the backdrop of recent bank failures, and evolving regulatory scrutiny on the banking sector, management liability and financial line insurers reassessed their exposure to banks and depositors overly exposed to vulnerable banks. Regional US banks experienced rate and retention increases, and insurers signalled more disciplined underwriting and further capacity assessments.