January 2023 renewals ‘most delayed, complex and difficult in decades’

The January treaty renewals in 2023 were the most “delayed, complex and difficult in decades”, according to a report released by Aon yesterday (9 May 2023).

Aon’s Q1 2023 global insights report revealed its findings on insurance market trends during the first quarter of the year.

It found that a “stubborn” inflation environment, challenging 2022 storm season, ongoing climate change concerns and pressure from investors to improve portfolio performance affected renewals at the start of 2023.

“The January 1 treaty renewals were the most delayed, complex and difficult in decades, introducing significant volatility into the market – especially for natural catastrophe exposed property risks and specialty risks impacted by war and inflation,” it said.

“The market for such risks was characterised by significant price increases, reduced capacity availability and modified coverage terms and conditions, particularly around valuations.”

Other findings 

Aon added that despite a “challenging” market environment, insurers continued to compete to retain and grow their portfolios in targeted areas where rate adequacy had been achieved and the scope of coverages had been clarified.

“Most notably, the directors and officers market experienced a continued moderation – with abundant capacity and price decreases available in some major markets – and cyber market headwinds continued to subside,” it said.

The report also revealed that the first quarter of 2023 saw management liability and financial lines insurers reassess their exposure to banks and depositors overly exposed to vulnerable banks.

“Regional US banks experienced rate and retention increases and insurers signalled more disciplined underwriting and further capacity assessments,” it said.