Aon launches Virtual Reinsurance Renewal Season online event
Chicago, IL (Sept. 8, 2020) – Aon plc, a leading global professional services firm providing a broad range of risk, retirement and health solutions, has released its 2020 Canadian Insurance Market Report, finding an acceleration of existing trends in the last year. This report is a representation of the depth of Aon’s thought leadership and market expertise, powered by industry-leading data and analytics, and Aon’s ability to drive success for clients.
The first quarter of 2020 saw a continuation and acceleration of the risk and insurance market shift that took hold in 2019. According to the report, pricing is continuing to rise, capacity is being withdrawn in several key lines of business, terms are being tightened, and the underwriting process has become increasingly rigorous.
The insurance market in general has changed significantly over the last two years, with insurers taking a far more disciplined approach to underwriting beyond merely looking at price adequacy. Across the board, insurers are reducing their limits where appropriate, exiting certain industry segments, and reducing coverage.
“It is vital that clients, brokers and insurers alike properly evaluate risk exposures to confirm that coverage and limits remain sufficient. With the breadth and depth of our global expertise, spanning both the insurance and reinsurance marketplace, we continue to be well positioned to challenge the marketplace and develop industry-leading solutions in collaboration with our insurer/reinsurer partners,” said Russell Quilley, Chief Broking Officer, Aon.
Other key findings include:
- The Canadian insurance industry continues to be an attractive location for capital deployment due to profitability and stability. The Canadian industry operates profitably with a 98.3 percent cumulative net combined ratio, compared to 98.6 percent in the United States and 99.7 percent in the United Kingdom.
- The top risks for insurers identified in the report include cyberattacks and data breaches, damage to reputation/brand, business interruption, regulatory changes, weather/natural disasters and an economic slowdown.
- Q1 total global reinsurance capital stood at USD590 billion, a YoY decrease of USD35 billion, or 6%. There was a 6% drop in traditional reinsurance and a 4% drop in alternative capital, ending the quarter at USD499 billion and USD91 billion, respectively.
- Most commercial property carriers have indicated they will be looking for rate increases and, in most cases, reducing capacity. Increased retentions will also be targeted, especially for clients that have a frequency or severity issue or undesirable risk quality.
- More insurers are looking to bolster core systems, add capability, and enhance customer experience through artificial intelligence (AI), digitization and other innovations. Many are beginning to finance innovations, facilitating more fundamental business model changes.
- The directors’ and officers’ (D&O) market is hardening monthly, with publicly listed companies experiencing the highest rate increases.
- Professional liability insurers are pulling back capacity and looking for rate increases for professions that are in perceived higher risk classes, such as architects, structural engineers, and geotechnical engineers.
- Property capacity is tightening in the energy sector and rates are pushing higher. Capacity is shrinking due to poor industry results, more conservative underwriting, and a withdrawal from the oil sands sector. Continued large loss activity in downstream property is driving the largest rate push overall.
- The novel coronavirus (COVID-19) pandemic has affected every sector of the Canadian economy and insurers continue to adapt to a hardening market.
Read the full report.
Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance. For more information, visit www.aon.com.
SOURCE: Aon plcTags: Aon, coronavirus, epidemic, market dynamics, report, trends