Airmic members say rate increases continue to slow with first signs of softening

Airmic said its latest member survey reveals continued “green shoots” for insurance buyers as rate increases slow and some risk managers now even report signs of market softening.

The UK risk management association polls its members every six months on the state of the insurance market. Some 63% of those surveyed in December on conditions in Q3 2022 reported a hard market, 36% neutral and 2% said it was soft.

This is the first time any respondents have said the market is softening for a couple of years, Airmic explained, and the number saying the market is hardening has been steadily falling.

In the Q1 2022 survey, 92% of Airmic members said the market was hard, with just 8% saying it was neutral and no one describing it as soft.

“Results from the latest survey conducted in December 2022 continue to suggest signs of ‘green shoots’, where the pace of the premium increases is slowing,” said Airmic.

However, 30% of respondents still believe market conditions will deteriorate in 2023.

Some 62% of Airmic members said premium rates were higher at their last renewal, 23% said they were the same and 15% lower.

Meanwhile, 39% said they faced more exclusions, 51% said they were the same and 10% saw fewer exclusions.

Airmic said its pulse survey also found that the pace of D&O rate increase is slowing. But real challenges persist for cyber insurance buyers in the UK. Airmic said members report “excessive demands” for data on cyber risk and “delays in delivering terms, often for too little cover at too much cost”.

The association added that Airmic members would like to see greater willingness from the insurance market to design policy coverage to meet their needs. Other challenges include global instability, market volatility and the need for better understanding and support for ESG initiatives, the pulse survey shows.

“After a period of large premium increases together with restrictions in cover, it is pleasing to see some stabilisation in certain areas. With global economic and political headwinds, businesses are looking for value in every dollar they spend,” said Airmic member Keith Jury.

“The value of insurance is being discussed in the boardroom. We need to work as an industry to deliver that value through meaningful cover at a fair and sustainable price together with expert, analytics, advice and knowledge,” he added.