Insurance market remains growth-oriented, creating opportunities for buyers: Aon

Many global insurers reported healthy profits in 2023, and with reinsurance market conditions improving for buyers, the insurance sector was once again growth-oriented in the second quarter of 2024, according to re/insurance broking group Aon.

According to Aon’s Q2 2024 overview of the global insurance marketplace, during the quarter, carriers remained disciplined and focused on underwriting and pricing for longer-term profitability and program stability.

“Insurer growth ambitions continued to translate into a competitive, well capitalized market environment characterized by continued price moderation, underwriting flexibility, and the availability of coverage options, especially for preferred risk types,” says the broker.

In the property market in Q2 2024, Aon witnessed competition among insurers driven by growth ambitions, which resulted in a buyer-friendly market for the majority of risks.

“The US market, in particular, experienced its most favorable conditions in almost seven years,” says Aon. “Desirable risks with profitable historical loss ratios experienced pricing outcomes ranging from single digit increases to low double digit decreases while risks in the Nordics, Brazil and Mexico, as well as certain high-risk sectors, experienced more challenging market conditions and less favorable placement outcomes.”

In the US casualty space, Aon notes continued scrutiny of exposures on both domestic and international placements, amid prior year reserve deterioration and ongoing concerns related to nuclear verdicts and adverse litigation trends.

“US-exposed and heavy industry risks experienced rate increases, more restrictive terms and conditions, and higher Umbrella attachment points. Well performing risks and those without US exposures generally saw healthy competition as insurers sought growth,” explains the firm.

On the D&O and cyber markets, Aon says that market environments were characterized by healthy competition and abundant capacity.

The broker also highlights improving reinsurance renewal conditions in 2024 for buyers, underlined by increased capacity and appetite from sellers that resulted in rate reductions for property catastrophe risk and improvements in terms and coverage at mid-year.

But despite a well-capitalised insurance and reinsurance market, Aon warns that the landscape is still fragile as natural catastrophe losses continue to be high, and adverse reserve development and social inflation make for an uncertain casualty outlook.

“The insurance market in Q2 2024 remained growth-oriented yet disciplined as insurer strategies focused on underwriting and pricing for longer-term profitability and program stability,” said Joe Peiser, global CEO of Commercial Risk at Aon. “Insurer growth ambitions continued to translate into a competitive, well capitalized market environment characterized by continued price moderation, underwriting flexibility, and the availability of coverage options.”

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