Accident & Health
Abundant capacity pressures rates
Insurers currently have a very healthy appetite for Accident & Health risks, attracting an abundance of underwriting capacity. This competitive market environment is reducing insurers’ opportunities to increase rates. While in the past 24 months insurance buyers faced average rate increases of +5 to 10%, in H1 of 2024 we saw rates plateauing at -5% to +5%.
Changes in policy terms and conditions
Policy wordings have changed to include an affirmation that losses arising from cyber events will be covered.
New market entrants
Redriff Underwriting has entered the Accident and Health space with an ex-QBE Re team of six members. Furthermore, Rokstone MGA and Aviva Syndicate are set to launch an Accident and Health offering.
Geographic/sector differences
Many underwriters are invoking war exclusions for exposures in Ukraine/Israel/Palestine. Insurers who agree to cover these territories are setting significantly higher rates. Any “One Person” line size has halved for these locations. COVID-exclusionary language is becoming more relaxed for “Temporary Total Disablement” with short “Elimination Periods”.
Outlook
Expected range in rate changes for the next 6 months for claims-free portfolios
Available capacity is in line with insurers’ growth plans in this risk area, leading to competition and aggressive rating.
Expected capacity change in the next 6 months for claims-free portfolios
There is no suggestion that any insurer is planning to exit the class, while capacity is set to expand with new entrants. Talent is moving around the markets leaving gaps to fill at some carriers.
Expected coverage change in the next 6 months for claims-free portfolios
As insurers are keen to grow in a highly competitive class, we expect that exclusionary language will be relaxed, rating will decrease and available limits will increase.
While in the past 24 months insurance buyers faced average rate increases of +5 to 10%, in H1 of 2024 we saw rates plateauing at -5% to +5%.
Emerging risks
Insurers may introduce wider connected or localised country exclusions and restrictions depending on the prolonged wars in Russia/Ukraine and Israel/Palestine. New governments, for example in the UK and the US following upcoming elections could lead to macro-economic and create wider knock-on effects leading to social unrest.
Renewal recommendations
To reach the best possible outcome at renewal, businesses should start the process early of gathering the required information and preparing the documents. Sharing comprehensive data with brokers will enable valued conversations with insurers.
For further information, please visit the Lockton Specialty page, or contact:
Francesca Ross
Broker Property & Casualty – Accident & Health, Sports & Contingency
E: francesca.ross@lockton.com