Rates and capacity continue to disappoint buyers - particularly for cyber - but there are some ‘green shoots’
Premium rates, and the scope of cover and capacity, have continued to disappoint. This is according to the latest Harsh Market Report from the Association of Risk and Insurance Managers (Airmic).
Nevertheless, the latest survey results suggest signs of ‘green shoots’ where the pace of the hardening is slowing, in line with other surveys on the market.
But we are not out of the woods yet, and premium rates for cyber are skyrocketing. A tenth of respondents experienced rate increases of more than 400%.
The report is also set in the context of growing discussions on the future of the London Market, with a view to its post- Brexit and post-pandemic life.
The pandemic-driven surge in the use of digital technologies by member organisations, many of which adjusted at short notice to remote working, has accelerated the longer-term trend towards digital transformation.
As respondents have underscored, current insurers stand to lose business to more modern, agile insurance competitors who are without legacy systems, unless they also up their game in the digital sphere.
“The insurance model is changing,” concludes the report. “It now more geared towards understanding risk and managing it better. Climate change is expected to cause a seismic growth in economic losses, and global insurance premiums will reach record levels.
“The insurance industry needs to rise to the challenge urgently. It needs to shift its focus from protection to prevention. New technologies such as artificial intelligence and machine learning will be key to reducing costs and creating value for all parties.
“Silos between the ‘risk’ and ‘insurance’ buckets are being removed. But the insurance industry still needs to respond in a more connected way. The insurance industry, risk professionals, and government need to collaborate and move forward together.”
Special report: Digital transformation
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Airmic publishes 2022 Harsh Market Report