Asia Perspectives

Asia region experienced 6% pricing increase, mainly driven by increases in property, directors and offers (D&O), financial and professional lines.

Asia Property

Property pricing rose 8% across the region, although we have witnessed countries across the region reacting at different speeds throughout the quarter.

• Clients seeking large Nat Cat Limits or have complex risks have seen outsized increases above the average in Q1.  We have observed an acceleration in this space compared to past quarters.  In addition, the lack of competition is contributing to pricing increase as well.
• Underwriting authority remains in the region but global leadership is interrogating the underwriting decisions in more detail, adding to the response times. The increase is seen to be in relation to exposures related to and affected by Covid-19.
• Distinct two-track market with international insurers driving increased rating pressure through their portfolio to a far greater extent compared to local insurers.
• Indigenous capacity for the small and medium sized accounts still represents the most attractive solution to many cost-conscious clients.

Asia Casualty

Casualty pricing was flat throughout Q1, largely a result of a continued benign claims environment.

• Complex product liability and recall policies present the most challenging accounts, with limited competition. This is also a result of international capacity withdrawals.
• Broadly, casualty pricing and capacity will be affected by the international insurers’ macro response to deteriorating profitability. Rating adequacy and reduced exposure management will be the drivers for casualty in Asia.

Asia FINPRO

Financial and professional liability pricing rose 8% across the quarter. We have seen an acceleration of this rise in the later part of Q1 with many segments seeing greater increases than the overall average. This is the largest increase observed in several years and the fourth consecutive quarter of increases.

• Pricing increased across the Asia region with a greater focus on D&O, Financial Institution lines, and Commercial Crime.
• Considerable underwriting scrutiny is being applied to D&O and Medical Malpractice, especially for risks with any perceived COVID exposures (both direct and indirect). The underwriting response times have also slowed considerably with an increasing need for regional and global referrals.
• Most international insurers on FINPRO lines have also turned their attention to reducing “per risk” capacity. This follows several years of typically underwriting close to their maximum line sizes.
• In general, we have seen a marked reduction in appetite to compete, especially on risks with claims or notification activity, where previously some insurers were prepared to be opportunistic.