Your guide to the insurance market and how it affects your business.
Evolving insurance market
In welcome news, the business insurance market continued to become more favourable for clients in the second half of 2023 and into 2024. Although the market remained challenging in specific areas, the moderation in pricing for several key commercial insurance lines that began in 2023 continued throughout, and into the new year.
Following several years of significant premium rises and challenging market conditions, confidence in the insurance market continued to grow. Premium increases slowed, as broader coverage options became available.
Since 2020, insurers had been exiting certain markets to avoid high losses, however, a reversal of this trend began last year. Capacity for businesses with quality risks returned and better pricing for hard-to-place risks improved as new competition entered the marketplace (in particular from London and Singapore).
Overall, there was increased stability and more competition, with premiums in most commercial lines levelling out. Clients have enjoyed greater choice as more options became available and renewed control over risk placement emerged. Clients also had greater control over how they structured risk, including the use of alternative risk transfer solutions.
However, the improving market conditions were influenced by the volatility of wider pressures including:
- inflation (core and social)
- interest rate movements
- capital market volatility
- economic growth (slowing locally and
- internationally)
- supply chain bottlenecks
- labour shortages, including specialist
- skills in some areas
- extreme weather events (summer 2023-24
- catastrophe losses exceeded $1.2 billion)
- reinsurance costs (in particular for property)
- challenging claims environment
- developing cyber threats (including generative AI)
- rising ESG activism and greater regulatory
- greenwashing scrutiny, and
- geopolitical conflicts.
It is expected these factors will continue to impact the insurance market throughout the remainder of 2024. However, there is cause for tempered optimism that conditions will continue to improve for many clients, bringing welcome relief after several very challenging years.
Download the latest EBM Market Summary here.
