EMEA pricing flat in Q4 and easier than other regions: Aon

The EMEA insurance market was flat overall from a pricing perspective in the last quarter of 2023 and slightly easier for buyers than other regions around the world, but things “varied widely” by risk and product, according to Aon.

The broker’s Q4 Market Insights Outlook reports that the flat pricing in EMEA compares to average rate increases between 1% and 10% in North America, Latin America and Asia Pacific.

“In EMEA, pricing varied considerably across products and segments, and pricing uncertainty continued to dominate conversations. While nat cat and related risks remained the dominant pricing considerations, risks that were seen as more benign were most likely to experience price reductions,” says Aon.

“Natural catastrophe-exposed and otherwise challenging risk types experienced the most significant price increases,” it adds. Meanwhile social inflation continued to impact casualty pricing around the world but was most prominent for US exposures.

The cyber and D&O markets continued to soften in Q4, and market conditions were generally “buyer-friendly”, characterised by premium reductions and enhanced coverages, says Aon.

The broker says EMA capacity was “ample”. But it notes that appetite for middle market and poor-performing risks was limited. It says that capacity increased in the Middle East as a result of international insurers’ growing interest in the region.

It says there was also ample capacity in North America. The good news for buyers is capacity was described as abundant in Asia Pacific and South America.

EMEA underwriting was “prudent” during the period and remained disciplined, but was more flexible for cyber and financial lines placements, says Aon. Scrutiny strengthened further when it came to property risks amid ongoing nat act concerns, particularly following flooding in Italy. Aon says underwriting was prudent in all other global regions, apart from North America, where the approach was flexible and more in buyers’ favour.

The report adds that deductibles and limits were flat in EMEA and around the world, with expiring figures achieved on most placements. High limits and lower deductibles were available  on some risks – especially cyber and D&O – as insureds reinvested their premium savings in programme enhancements. Limits and deductibles were flat across the globe in Q4, according to Aon.

It adds that coverage was stable across all regions. Most placements in EMEA renewed with expiring coverage terms and conditions, including exclusions for per and polyfluoroalkyl substances (PFAS) and war. But South Africa risks experienced coverage limitations, especially on property and liability.