Insurance Market Update H2 2022

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Lockton Companies LLP Insurance Market Update H2 2022

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Alex Boswell Partner T +44 (0)20 7933 2897 E alex boswell lockton com

We are pleased to share our H2 2022 Insurance Market Update

Busy light trails on a curved road Nightscape of Ariake bay area Koto-ku, Tokyo, Japan

volatile nature of the season, with September ending with significant property damage and tragic loss of life Despit

This issue provides insights across 22 business segments and includes a spotlight feature on our MENA operations and

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Alex Boswell Partner T +44 (0)20 7933 2897 E alex boswell lockton com

We are pleased to share our H2 2022 Insurance Market Update

Insurance Market Update - H2 2022 Lockton Companies LLP

Reinsurers continue to warn of the strain on pricing from sustained inflation, increasing claims, climate change, the

Executive Summary

In the past three years, the world has undergone significant pressures, following unprecedented circumstances From t

supply-chain disruptions, have all led to increased volatility and uncertainty for businesses that makes strategic pl

Businesses need to be cognisant of these challenges while ensuring operational sustainability and organic growth, whi

Christian Wuestner Content Director T +44 (0) 20 7933 2223 E christian wuestner lockton com

Inflation and growth hiatus spook the world Staggering inflation and a significant slowdown in growth are troubling b

Macro-economic insurance environment

Christian Wuestner Content Director T +44 (0) 20 7933 2223 E christian wuestner lockton com

Businesswoman at top of stairs at modern business district in Paris, France

Christian Wuestner Content Director T +44 (0) 20 7933 2223 E christian wuestner lockton com

Inflation and growth hiatus spook the world Staggering inflation and a significant slowdown in growth are troubling b

Macro-economic insurance environment

Christian Wuestner Content Director T +44 (0) 20 7933 2223 E christian wuestner lockton com

The conflict in Ukraine and the consequent rise in commodity prices have impacted the economic recovery following the

Insurance Market Update - H2 2022 Lockton Companies LLP

Reflections in the wet sidewalk of modern office skyscrapers in City of London

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Evolution of global inflation and growth forecasts for 2023

Source: World Bank

In September, the World Bank has warned that the world may be edging toward a global recession as central banks acros

Impact on the insurance sector Most insurance carriers have demonstrated remarkable flexibility and resilience in ove

For the Property and Casualty (P&C) sector, Swiss Re expects global premiums to grow by around 2 7% in 2023 and on av

Over time, higher interest rates are likely to benefit insurers through improved investment returns as their bond por

Inflation is anticipated to reach 6 6 percent in advanced economies and 9 5 percent in emerging market and developing

Central banks around the globe are tightening monetary policies to control inflation On 22 September, the Bank of En

Global policy rate rises and cuts

Source: World Bank

p&c premium growth forecasts in the real terms (2022-2026)

Source: Swiss Re Institute

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Evolution of global inflation and growth forecasts for 2023

Source: World Bank

In September, the World Bank has warned that the world may be edging toward a global recession as central banks acros

Impact on the insurance sector Most insurance carriers have demonstrated remarkable flexibility and resilience in ove

For the Property and Casualty (P&C) sector, Swiss Re expects global premiums to grow by around 2 7% in 2023 and on av

Over time, higher interest rates are likely to benefit insurers through improved investment returns as their bond por

Inflation is anticipated to reach 6 6 percent in advanced economies and 9 5 percent in emerging market and developing

Central banks around the globe are tightening monetary policies to control inflation On 22 September, the Bank of En

Global policy rate rises and cuts

Source: World Bank

Insurance Market Update - H2 2022 Lockton Companies LLP

Insurance Market Update - H2 2022 Lockton Companies LLP

Canary Wharf at night

Jim McDowall Property Placement Broker

Insurers drive competition through growth strategies Growth strategies set by property insurers at the beginning of 2

market, the scrutiny over an insurer s accumulation has increased Where this becomes problematic is with unspecifie

For further information, please contact: Jim McDowall Property Placement Broker E jim mcdowall lockton com

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Canary Wharf at night

Jim McDowall Property Placement Broker

Insurers drive competition through growth strategies Growth strategies set by property insurers at the beginning of 2

market, the scrutiny over an insurer s accumulation has increased Where this becomes problematic is with unspecifie

For further information, please contact: Jim McDowall Property Placement Broker E jim mcdowall lockton com

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Insurance Market Update - H2 2022 Lockton Companies LLP

2 North American property

Paul Jenkins Team Leader, SVP North American Property

Rising inflation creates new insurance market dynamic US price inflation has increased sharply in 2022, a development

Ensuring that every client is fully indemnified when they are affected by an insured event or covered loss, is key fo

Hardening reinsurance market to affect property insurers All indicators point to a high likelihood that reinsurance r

Reinsurance rates have fallen behind those in the primary insurance segment in recent years, and this is now being re

A flurry of events is driving up inflation: post-pandemic supply chain bottlenecks, the war in Ukraine, higher energy

US inflation rate

Source: TradingEconomics

2 North American property

Paul Jenkins Team Leader, SVP North American Property

Rising inflation creates new insurance market dynamic US price inflation has increased sharply in 2022, a development

Ensuring that every client is fully indemnified when they are affected by an insured event or covered loss, is key fo

Hardening reinsurance market to affect property insurers All indicators point to a high likelihood that reinsurance r

Reinsurance rates have fallen behind those in the primary insurance segment in recent years, and this is now being re

Insurance Market Update - H2 2022 Lockton Companies LLP

Established reinsurers are reducing capacity or even exiting the class Recent examples of this are: September 2022

For further information, please contact: Paul Jenkins Team Leader, SVP North American Property E paul jenkins lockto

With all this in mind, the availability of capacity and the cost of cover is likely to change, and this could materia

For further information, please contact: Paul Jenkins Team Leader, SVP North American Property E paul jenkins lockto

Established reinsurers are reducing capacity or even exiting the class Recent examples of this are: September 2022

For further information, please contact: Paul Jenkins Team Leader, SVP North American Property E paul jenkins lockto

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With all this in mind, the availability of capacity and the cost of cover is likely to change, and this could materia

Insurance Market Update - H2 2022 Lockton Companies LLP

Capacity Despite these challenges global Insurable limits of over USD 1bn continue to be readily available for softer

3 INTERNATIONAL PROPERTY

Roland Haiser Partner Wholesale Property and Casualty

Rate increases slow but challenges remain Market Background 2022 continues to be a challenging year with commercial p

Individual geographies have been particularly impacted, such as Australia, where the 2022 spring flooding was the wor

global natural catastrophe events

USD billion (in 2021 prices)

Capacity Despite these challenges global Insurable limits of over USD 1bn continue to be readily available for softer

3 INTERNATIONAL PROPERTY

Roland Haiser Partner Wholesale Property and Casualty

Rate increases slow but challenges remain Market Background 2022 continues to be a challenging year with commercial p

Individual geographies have been particularly impacted, such as Australia, where the 2022 spring flooding was the wor

global natural catastrophe events

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USD billion (in 2021 prices)

Insurance Market Update - H2 2022 Lockton Companies LLP

Pricing considerations Underwriters are generally achieving rate rises in the 5% 10% range, although this varies sign

London Market Regional Property rate Movements

Source: Global Insurance Market Index, Swiss Re Institute

Territory,Risk loss free % change,Risk loss hit % change ,Catastrophe loss free % change,Catastrophe loss hit % chang

For further information, please contact: Roland Haiser Partner Wholesale P&C E roland haiser lockton com

Terms & Conditions Deductible levels are generally stable, following three years of adjustment and a focussed rebalan

For the first time since hurricanes Charley, Ivan, Katrina, Rita and Wilma in 2004 2005, natural catastrophe capacity

Pricing considerations Underwriters are generally achieving rate rises in the 5% 10% range, although this varies sign

London Market Regional Property rate Movements

Source: Global Insurance Market Index, Swiss Re Institute

Territory,Risk loss free % change,Risk loss hit % change ,Catastrophe loss free % change,Catastrophe loss hit % chang

Polygon

For further information, please contact: Roland Haiser Partner Wholesale P&C E roland haiser lockton com

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Terms & Conditions Deductible levels are generally stable, following three years of adjustment and a focussed rebalan

Evening commute with silhouette of businessman walking at Shiodome business district in Tokyo, Japan

For further information, please contact: Roland Haiser Partner Wholesale P&C E roland haiser lockton com

Insurance Market Update - H2 2022 Lockton Companies LLP

UK, London, digital composite of modern skyscrapers including the Shard, the Walkie Talkie tower, Leadenhall building, the Scalpel, One Blackfriars and Southbank tower, illuminated at dusk against vibrant sky

Rate correction despite performance improvements As we look towards the final few months of 2022, insurers continue t

Whilst these changes have yet to be implemented in the UK market, there is a notable increase in the awareness of the

Terrorism: In response to the Manchester terror attacks of 2017, the UK Government recently implemented Martyn s Law

Sara Baker Retail Casualty Broker

Aemilia Guest Retail Casualty Broker

UK, London, digital composite of modern skyscrapers including the Shard, the Walkie Talkie tower, Leadenhall building, the Scalpel, One Blackfriars and Southbank tower, illuminated at dusk against vibrant sky

Rate correction despite performance improvements As we look towards the final few months of 2022, insurers continue t

Whilst these changes have yet to be implemented in the UK market, there is a notable increase in the awareness of the

Terrorism: In response to the Manchester terror attacks of 2017, the UK Government recently implemented Martyn s Law

Sara Baker Retail Casualty Broker

Aemilia Guest Retail Casualty Broker

Insurance Market Update - H2 2022 Lockton Companies LLP

Stock market financial growth chart from above on dark background

Outlook To tackle rate correction and coverage challenges, and to ensure the best possible outcome at renewal in the

points to as high as 10m, in attempts to protect themselves from ever-rising values of US claims We are seeing a cr

Rates and capacity Following on from 18 months of rate correction , there is an incremental return of healthy compet

For further information, please contact: Sara Baker Retail Casualty Broker E sara baker lockton com Aemilia Guest Re

In the wake of the lessening impact of Covid-19, clients feel more comfortable re-marketing their risk To avoid sa

The market continues to look favourably on those clients who are willing to take on more of their risk Lockton s b

Stock market financial growth chart from above on dark background

Outlook To tackle rate correction and coverage challenges, and to ensure the best possible outcome at renewal in the

points to as high as 10m, in attempts to protect themselves from ever-rising values of US claims We are seeing a cr

Rates and capacity Following on from 18 months of rate correction , there is an incremental return of healthy compet

For further information, please contact: Sara Baker Retail Casualty Broker E sara baker lockton com Aemilia Guest Re

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In the wake of the lessening impact of Covid-19, clients feel more comfortable re-marketing their risk To avoid sa

The market continues to look favourably on those clients who are willing to take on more of their risk Lockton s b

For further information, please contact: Sara Baker Retail Casualty Broker E sara baker lockton com

Aemilia Guest Retail Casualty Broker E aemilia guest lockton com

Insurance Market Update - H2 2022 Lockton Companies LLP

slowing down Whilst growth remains key for carriers, it is not all achieved with hefty rate increases, as many marke

However, not all insurers are showing positive trends The market remains under pressure to improve profitability, an

Kate Ruddell US Casualty Broker Property and Casualty - Wholesale

Rate increases further stabilise as insurers seek growth According to the latest CIAB quarterly survey, the second qu

As verdicts and defence costs continue to increase, underwriters will be closely looking at inflation when pricing fo

Given the current conflict, carriers are unable to fulfil their obligations under the worldwide coverage provided by

2 No additional exclusion and PFAS to be excluded only via the pollution exclusion with an amended definition of p

For further information, please contact: Kate Ruddell US Casualty Broker E kate ruddell lockton com

slowing down Whilst growth remains key for carriers, it is not all achieved with hefty rate increases, as many marke

However, not all insurers are showing positive trends The market remains under pressure to improve profitability, an

Kate Ruddell US Casualty Broker Property and Casualty - Wholesale

Rate increases further stabilise as insurers seek growth According to the latest CIAB quarterly survey, the second qu

As verdicts and defence costs continue to increase, underwriters will be closely looking at inflation when pricing fo

Given the current conflict, carriers are unable to fulfil their obligations under the worldwide coverage provided by

2 No additional exclusion and PFAS to be excluded only via the pollution exclusion with an amended definition of p

For further information, please contact: Kate Ruddell US Casualty Broker E kate ruddell lockton com

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For further information, please contact: Kate Ruddell US Casualty Broker E kate ruddell lockton com

Insurance Market Update - H2 2022 Lockton Companies LLP

6 INTERNATIONAL casualty

Liam Kent Senior Vice President Property and Casualty - Wholesale

Inflation pushes primary rates Primary rate increases have been steadying in recent renewals, with flat renewals for

The conflict in Ukraine is fuelling inflation, which is now expected to remain elevated for longer than previously fo

6 INTERNATIONAL casualty

Liam Kent Senior Vice President Property and Casualty - Wholesale

For further information, please contact: Liam Kent Senior Vice President Property and Casualty - Wholesale E liam ke

We do make it clear to underwriters that our clients are also under pressure through growing inflation and the cost-o

Consequently, adequate policy limits from two three years ago may need uplifting to keep pace In a time of increasin

For further information, please contact: Liam Kent Senior Vice President Property and Casualty - Wholesale E liam ke

Insurance Market Update - H2 2022 Lockton Companies LLP

Product recall underwriters flag concern about recent large loss events Expensive product recall events, where whole

production because of a salmonella contamination at a factory in Belgium On 27th June, the cocoa processor and choco

7 PRODUCT RECALL

Ian Harrison Partner Global Head of Recall Practice Group

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7 PRODUCT RECALL

Ian Harrison Partner Global Head of Recall Practice Group

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Impact on insurance In both recall events, food processing plants have remained closed for a considerable time, gener

Other speciality lines of cover have suffered dramatic and unforeseen accumulation losses (contingency during Covid-1

For further information, please contact: Ian Harrison Partner Global Head of Product Recall Practice Group E ian har

reduce their exposure to supply chain risks These may include highly audited supply sources, back-up, or alternative

For further information, please contact: Ian Harrison Partner Global Head of Product Recall Practice Group E ian har

Insurance Market Update - H2 2022 Lockton Companies LLP

Education was the sector most impacted by ransomware, accounting for 23% of all ransomware incidents reported Manu

Underwriters step up scrutiny Continuing the patterns observed over the previous year, the cyber market continues to

Vanessa Cathie Special Counsel Professional Financial Services

Education was the sector most impacted by ransomware, accounting for 23% of all ransomware incidents reported Manu

Underwriters step up scrutiny Continuing the patterns observed over the previous year, the cyber market continues to

Vanessa Cathie Special Counsel Professional Financial Services

Ransomware attacks made up 29% of cyber

21% average decrease in capacity deployed by insurers per layer

47% of attacks used phishing as the means of initial access

Underwriter scrutiny continuing to increase

Lockton Portfolio average premium increase was 70% in Q2 2022

Six new markets entering the cyber market

Lockton Portfolio average increase in retention was 145% in Q2 2022

Premium increases beginning to slow, predicted premium rate increases between 20% and 40%

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Insurance Market Update - H2 2022 Lockton Companies LLP

Market impact For many clients, given the typical annual renewal cycle, there may be no sign of the rapid rate increa

For further information, please contact: Vanessa Cathie Special Counsel Professional Financial Services E vanessa ca

With the arrival of Probitas, IQUW, Resilience, Coalition, CV Starr and Antares, six insurers have entered the cyber

Outlook Although premium per million and primary retentions continue to climb on a year-on-year basis, we are startin

Close-up of female finger pointing LED display screen Futuristic concept Smart technology

Market impact For many clients, given the typical annual renewal cycle, there may be no sign of the rapid rate increa

For further information, please contact: Vanessa Cathie Special Counsel Professional Financial Services E vanessa ca

Polygon

Polygon

With the arrival of Probitas, IQUW, Resilience, Coalition, CV Starr and Antares, six insurers have entered the cyber

Outlook Although premium per million and primary retentions continue to climb on a year-on-year basis, we are startin

Close-up of female finger pointing LED display screen Futuristic concept Smart technology

For further information, please contact: Vanessa Cathie Special Counsel Professional Financial Services E vanessa ca

Insurance Market Update - H2 2022 Lockton Companies LLP

9 Professional indemnity

David Isherwood Senior Vice President Professional Indemnity

Color image depicting cranes and heavy duty construction equipment on the London skyline as the sun sets The cranes have been busy constructing blocks of flats and apartments to ease the housing crisis in London and the south east of England Lots of room for copy space

A cautiously optimistic outlook Following several years of hard markets, a cautious but optimistic view of the profes

The Construction Leadership Council (CLC) conducted a survey in 2021, looking at construction PII renewals The surve

9 Professional indemnity

David Isherwood Senior Vice President Professional Indemnity

Whilst acknowledging this cautious optimism, professional indemnity insurance for the construction sector remains cha

Color image depicting cranes and heavy duty construction equipment on the London skyline as the sun sets The cranes have been busy constructing blocks of flats and apartments to ease the housing crisis in London and the south east of England Lots of room for copy space

Insurance Market Update - H2 2022 Lockton Companies LLP

Those firms requiring any one claim cover continue to purchase higher aggregated limits of indemnity, relying on r

Coming back to the here and now, whilst Lloyds of London s year end 2021 results posted a 2 3bn before tax profit a

For further information, please contact: David Isherwood Senior Vice President Professional Indemnity E david isherw

Those firms requiring any one claim cover continue to purchase higher aggregated limits of indemnity, relying on r

Coming back to the here and now, whilst Lloyds of London s year end 2021 results posted a 2 3bn before tax profit a

For further information, please contact: David Isherwood Senior Vice President Professional Indemnity E david isherw

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For further information, please contact: David Isherwood Senior Vice President Professional Indemnity E david isherw

Insurance Market Update - H2 2022 Lockton Companies LLP

Market conditions improve for D&O insurance buyers The directors and officers (D&O) liability insurance market has

Senior businessman in suit looking out of window

10 D&O INDEMNITY

Michael Lea Partner Global Professional and Financial Risks

New entrants Increased D&O premiums attracted new players with aggressive premium growth targets to the D&O market T

Market conditions improve for D&O insurance buyers The directors and officers (D&O) liability insurance market has

Senior businessman in suit looking out of window

10 D&O INDEMNITY

Michael Lea Partner Global Professional and Financial Risks

New entrants Increased D&O premiums attracted new players with aggressive premium growth targets to the D&O market T

Insurance Market Update - H2 2022 Lockton Companies LLP

Two businesswomen working together at the office, going over business documents

Clients will need to decide what their priorities are when faced with several competing options for their business A

Two businesswomen working together at the office, going over business documents

For further information, please contact: Michael Lea Partner Global Professional and Financial Risks E michael lea l

General trends in D&O insurance Greater number of insurers willing to quote primary Premiums largely reducing, es

For further information, please contact: Michael Lea Partner Global Professional and Financial Risks E michael lea l

Insurance Market Update - H2 2022 Lockton Companies LLP

Construction insurance market settled with some exceptions The Construction market is currently fairly settled in man

Annual programmes: insurers are still looking to increase rates nominally by 5 10%, if the account has performed well

11 CONSTRUCTION

Lewis Coward Head of Placement Global Construction Practice

Cross-laminated timber (CLT) hybrid timber frame construction: with the construction industry facing pressures aroun

For further information, please contact: Lewis Coward Head of Placement Global Construction Practice E lewis coward

Outlook For the rest of 2022, we anticipate further stabilisation of the market, driven by established lead insurers

Construction insurance market settled with some exceptions The Construction market is currently fairly settled in man

Annual programmes: insurers are still looking to increase rates nominally by 5 10%, if the account has performed well

11 CONSTRUCTION

Lewis Coward Head of Placement Global Construction Practice

Cross-laminated timber (CLT) hybrid timber frame construction: with the construction industry facing pressures aroun

For further information, please contact: Lewis Coward Head of Placement Global Construction Practice E lewis coward

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Outlook For the rest of 2022, we anticipate further stabilisation of the market, driven by established lead insurers

For further information, please contact: Lewis Coward Head of Placement Global Construction Practice E lewis coward

Insurance Market Update - H2 2022 Lockton Companies LLP

Trends point in the right direction Whilst challenges remain, the real estate insurance market has responded well thr

Certain risk profiles will continue to attract larger premium rate increases, primarily due to the following factors:

Rob Hunter Senior Vice President Global Real Estate and Construction

Craig Charlton Senior Vice President Global Real Estate and Construction

Rob Hunter Senior Vice President Global Real Estate and Construction

Craig Charlton Senior Vice President Global Real Estate and Construction

Challenges Claims Inflation There are a number of factors which are currently having a significant bearing on the ris

Index Linking It is imperative that index linking is applied in the intervening period between valuations, so as to c

Whilst increases remain the norm, these are trending in the right direction A further positive sign is that many ins

For further information, please contact: Rob Hunter Senior Vice President Global Real Estate and Construction E rob

For further information, please contact: Rob Hunter Senior Vice President Global Real Estate and Construction E rob

Craig Charlton Senior Vice President Global Real Estate and Construction E craig charlton lockton com

Insurance Market Update - H2 2022 Lockton Companies LLP

woken to a vast number of live event enquiries, seeking cancellation coverage As a result, underwriters are speaking

There is the possibility that some event organisers may decide to self-insure, due to the increased premiums they are

Andy Thompson Senior Vice President Accident, Health, Sports and Contingency

Optimism returns in a post-Covid world Following two years of Covid-19-related losses due to restrictions imposed on

A number of other rock and pop tours have also either been cancelled or postponed, for various different reasons Thi

For further information, please contact: Andy Thompson Senior Vice President Accident, Health, Sports and Contingency

Notwithstanding, the market is in a good position to thrive over the coming years and the outlook is promising Event

Crowd of people cheering at a music festival at night, a woman riding on her boyfriends shoulders

woken to a vast number of live event enquiries, seeking cancellation coverage As a result, underwriters are speaking

There is the possibility that some event organisers may decide to self-insure, due to the increased premiums they are

Andy Thompson Senior Vice President Accident, Health, Sports and Contingency

Optimism returns in a post-Covid world Following two years of Covid-19-related losses due to restrictions imposed on

A number of other rock and pop tours have also either been cancelled or postponed, for various different reasons Thi

For further information, please contact: Andy Thompson Senior Vice President Accident, Health, Sports and Contingency

Polygon

Polygon

Notwithstanding, the market is in a good position to thrive over the coming years and the outlook is promising Event

For further information, please contact: Andy Thompson Senior Vice President Accident, Health, Sports and Contingency

Insurance Market Update - H2 2022 Lockton Companies LLP

Social unrest, Ukraine conflict impact war, terrorism and political violence market Political instability, the COVID-

14 Crisis Management

Matt Humphries Head of Crisis Management

Police shields and shadows at activist protest

14 Crisis Management

Matt Humphries Head of Crisis Management

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compete with Terrorism Risk Insurance Act (TRIA) on price, whilst offering a robust, claims-tested product for certif

Required actions for client service teams: Existing accounts: please keep an eye out for early renewal invitations

For further information, please contact: Matt Humphries Head of Crisis Management E matthew humphries lockton com

Police shields and shadows at activist protest

For further information, please contact: Matt Humphries Head of Crisis Management E matthew humphries lockton com

Insurance Market Update - H2 2022 Lockton Companies LLP

15 Accident & Health

Larry Spurgeon Senior Vice President Head of Accident & Health

Stabilisation follows market hardening After years of a tightening insurance landscape, overall capacity in the accid

Happy doctor and businessman cooperating while making plans over touchpad at doctor's office Focus is on doctor

The market had been subject to a tightening insurance landscape since 2019, the Decile 10 initiative put in place by

That said, we have seen insurers withdrawing from worst-performing territories and sub classes Professional sports,

Given the small premium, high-volume nature of accident and health business, much of the premium written into the Lon

travel insurers, who were impacted significantly by Covid related claims for trip cancellations and medical expenses

For further information, please contact: Larry Spurgeon Senior Vice President Accident, Health, Sports and Contingenc

15 Accident & Health

Larry Spurgeon Senior Vice President Head of Accident & Health

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Stabilisation follows market hardening After years of a tightening insurance landscape, overall capacity in the accid

Happy doctor and businessman cooperating while making plans over touchpad at doctor's office Focus is on doctor

Rectangle

The market had been subject to a tightening insurance landscape since 2019, the Decile 10 initiative put in place by

That said, we have seen insurers withdrawing from worst-performing territories and sub classes Professional sports,

Given the small premium, high-volume nature of accident and health business, much of the premium written into the Lon

travel insurers, who were impacted significantly by Covid related claims for trip cancellations and medical expenses

For further information, please contact: Larry Spurgeon Senior Vice President Accident, Health, Sports and Contingenc

Polygon

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For further information, please contact: Larry Spurgeon Senior Vice President Accident, Health, Sports and Contingenc

Insurance Market Update - H2 2022 Lockton Companies LLP

Photo taken in Illichivs'k, Ukraine

Hull rates stabilise but P&I sees major adjustments With corrective measures to rates and terms largely behind us, th

16 Marine Hull and machinery

Michael Reynolds Product Head Marine Hull and Liability

Robert Waterson Marine Hull Head of the Americas

Norwegian and French markets remain competitive, and appetites are increasing, making them viable and reliable altern

Photo taken in Illichivs'k, Ukraine

Hull rates stabilise but P&I sees major adjustments With corrective measures to rates and terms largely behind us, th

16 Marine Hull and machinery

Michael Reynolds Product Head Marine Hull and Liability

Robert Waterson Marine Hull Head of the Americas

Norwegian and French markets remain competitive, and appetites are increasing, making them viable and reliable altern

hull rates

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Insurance Market Update - H2 2022 Lockton Companies LLP

Protection & Indemnity (P&I) This year s P&I renewal season was one of the most difficult in a generation with almost

The clubs continue to point to the increased frequency and severity of pool claims, with 2021 poised to be the worst

P&I renewal season

Recent news of the pending merger between the North and Standard Clubs, signals potential further consolidation in th

For further information, please contact: Michael Reynolds Product Head Marine Hull and Liability E michael reynolds

Container terminal at dusk, view from cargo ship

Protection & Indemnity (P&I) This year s P&I renewal season was one of the most difficult in a generation with almost

The clubs continue to point to the increased frequency and severity of pool claims, with 2021 poised to be the worst

P&I renewal season

Rectangle

Recent news of the pending merger between the North and Standard Clubs, signals potential further consolidation in th

For further information, please contact: Michael Reynolds Product Head Marine Hull and Liability E michael reynolds

Polygon

Polygon

For further information, please contact: Michael Reynolds Product Head Marine Hull and Liability E michael reynolds

Robert Waterson Marine Hull Head of the Americas E robert waterson lockton com

Insurance Market Update - H2 2022 Lockton Companies LLP

17 Marine port & terminal

Michael McGratten Senior Vice President Marine & Transportation

Underwriters focus on rate adequacy Whilst many insurers posted overall positive performances for H2 2021, underwrite

The severity of liability claims has increased, courtesy of social inflation and increased indemnity awards in certai

We expect the pace of ate increases to decelerate, despite the outbreak of war in Ukraine: Marine liability: +5% to

3D illustration Background for advertising and wallpaper in investment and storage cargo scene 3D rendering in decorative concept

17 Marine port & terminal

Michael McGratten Senior Vice President Marine & Transportation

Underwriters focus on rate adequacy Whilst many insurers posted overall positive performances for H2 2021, underwrite

The severity of liability claims has increased, courtesy of social inflation and increased indemnity awards in certai

We expect the pace of ate increases to decelerate, despite the outbreak of war in Ukraine: Marine liability: +5% to

Lloyd s Decile 10 remediation plan was integral to the overall market s 2021 combined ratio falling to 93 5% (2020 wa

Insurance Market Update - H2 2022 Lockton Companies LLP

Container ship in import export and business logistic, By crane, Trade Port, Shipping cargo to harbor, Aerial view from drone, International transportation, Business logistics concept

Container ship in import export and business logistic, By crane, Trade Port, Shipping cargo to harbor, Aerial view from drone, International transportation, Business logistics concept

For further information, please contact: Michael McGratten Senior Vice President Marine & Transportation E michael m

Key takeaways Lloyd s Decile 10 remediation plan was integral to the overall market s 2021 combined ratio falling t

Cautious competition is apparent, as accounts are renewed again within this market cycle but new losses and deterio

Container ship in import export and business logistic, By crane, Trade Port, Shipping cargo to harbor, Aerial view from drone, International transportation, Business logistics concept

Container ship in import export and business logistic, By crane, Trade Port, Shipping cargo to harbor, Aerial view from drone, International transportation, Business logistics concept

For further information, please contact: Michael McGratten Senior Vice President Marine & Transportation E michael m

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Key takeaways Lloyd s Decile 10 remediation plan was integral to the overall market s 2021 combined ratio falling t

Cautious competition is apparent, as accounts are renewed again within this market cycle but new losses and deterio

For further information, please contact: Michael McGratten Senior Vice President Marine & Transportation E michael m

Insurance Market Update - H2 2022 Lockton Companies LLP

We are expecting additional pricing pressure in the next 12 months, as the direction of the lessor claims from Russia

Tim Liddiard Head of Aviation

Geopolitical instability impacts war coverage With the prospect of substantial losses and a general heightened geopol

We are expecting additional pricing pressure in the next 12 months, as the direction of the lessor claims from Russia

Tim Liddiard Head of Aviation

Geopolitical instability impacts war coverage With the prospect of substantial losses and a general heightened geopol

Insurance Market Update - H2 2022 Lockton Companies LLP

Empty airport runaway with braking and maneuvering marks, designation 29 and all navigation lights on at the colorful sunset

Capacity Currently there is sufficient capacity for airline risks all core coverages We have seen some scaling back

Outlook Uncertainty and fallout from the Russia Ukraine conflict continues The effect on the market depends on th

For further information, please contact: Tim Liddiard Head of Aviation E tim liddiard lockton com

Empty airport runaway with braking and maneuvering marks, designation 29 and all navigation lights on at the colorful sunset

Capacity Currently there is sufficient capacity for airline risks all core coverages We have seen some scaling back

Outlook Uncertainty and fallout from the Russia Ukraine conflict continues The effect on the market depends on th

For further information, please contact: Tim Liddiard Head of Aviation E tim liddiard lockton com

Polygon

Polygon

For further information, please contact: Tim Liddiard Head of Aviation E tim liddiard lockton com

Insurance Market Update - H2 2022 Lockton Companies LLP

Freight Trains and Railways at twilight

Peter Hall Partner Head of Cargo & Logistics

Cargo market reacts to commodity inflation concerns Companies shipping and storing commodities face new challenges an

The significant market capacity available will ensure that buyers have options, as competition promotes favourable pr

For further information, please contact: Peter Hall Partner Head of Cargo & Logistics E peter hall lockton com

Cargo losses Significant recent global cargo losses include the sinking of Felicity Ace car carrier loaded with luxur

Cargo insurance buyers can expect stability and a general levelling of premium expense, although there remains uncert

Freight Trains and Railways at twilight

Peter Hall Partner Head of Cargo & Logistics

Cargo market reacts to commodity inflation concerns Companies shipping and storing commodities face new challenges an

The significant market capacity available will ensure that buyers have options, as competition promotes favourable pr

For further information, please contact: Peter Hall Partner Head of Cargo & Logistics E peter hall lockton com

Polygon

Polygon

Cargo losses Significant recent global cargo losses include the sinking of Felicity Ace car carrier loaded with luxur

Cargo insurance buyers can expect stability and a general levelling of premium expense, although there remains uncert

For further information, please contact: Peter Hall Partner Head of Cargo & Logistics E peter hall lockton com

Insurance Market Update - H2 2022 Lockton Companies LLP

Leading economists and central banks must deliberate on how best to manage these issues, and the secondary effects th

Underwriting strategy Insurers in the credit & political risk insurance (CPRI) market continue to focus on key partne

20 Political and trade credit

Charles Purvis Broker Political & Credit Risks

The interest rate and inflation challenge As the global economy continues to feel the effect of the global pandemic a

Leading economists and central banks must deliberate on how best to manage these issues, and the secondary effects th

Underwriting strategy Insurers in the credit & political risk insurance (CPRI) market continue to focus on key partne

Stone columns and blue sky

20 Political and trade credit

Charles Purvis Broker Political & Credit Risks

The interest rate and inflation challenge As the global economy continues to feel the effect of the global pandemic a

Insurance Market Update - H2 2022 Lockton Companies LLP

Mature female business executive leading team meeting in office conference room

For further information, please contact: Charles Purvis Broker Political & Credit Risks E charles purvis lockton com

Recommendations While the above doesn t paint a pretty picture, there are several ways for an insured to utilise the

Following a period of retrenchment earlier in the year, the market has generally adopted a business as usual approa

Mature female business executive leading team meeting in office conference room

For further information, please contact: Charles Purvis Broker Political & Credit Risks E charles purvis lockton com

Polygon

Polygon

Recommendations While the above doesn t paint a pretty picture, there are several ways for an insured to utilise the

Following a period of retrenchment earlier in the year, the market has generally adopted a business as usual approa

Polygon

For further information, please contact: Charles Purvis Broker Political & Credit Risks E charles purvis lockton com

Insurance Market Update - H2 2022 Lockton Companies LLP

pile of light bulbs on table with light emitting from centre

21 Global Energy

Alex Irvin Power & Utilities Broker Lockton Global Energy & Power

Rate increases continue to decelerate Rate increases have continued to decelerate with the conventional power market

Russian and Ukrainian political instability This has led to an 80% reduction in capacity of Nord Stream 1, the pipel

For further information, please contact: Alex Irvin Power & Utilities Broker Lockton Global Energy & Power E alex ir

Conventional power markets are continuing to invest in their renewable energy offerings, as a way of managing their c

pile of light bulbs on table with light emitting from centre

21 Global Energy

Alex Irvin Power & Utilities Broker Lockton Global Energy & Power

Rate increases continue to decelerate Rate increases have continued to decelerate with the conventional power market

Russian and Ukrainian political instability This has led to an 80% reduction in capacity of Nord Stream 1, the pipel

For further information, please contact: Alex Irvin Power & Utilities Broker Lockton Global Energy & Power E alex ir

Conventional power markets are continuing to invest in their renewable energy offerings, as a way of managing their c

For further information, please contact: Alex Irvin Power & Utilities Broker Lockton Global Energy & Power E alex ir

Insurance Market Update - H2 2022 Lockton Companies LLP

22 Renewable Energy

Sam Northcote-Green Renewable Energy Broker Lockton Global Energy & Power

Underwriting reaches profitability Whilst losses from natural catastrophes (NAT CATs) have continued to impact renewa

Background During the past five to ten years, renewable energy insurers reported considerable losses across their por

Market conditions Logic would indicate that with the influx of new capacity, and insurers desperate to develop market

2 Supply chain issues Alongside the increased cost of replacement parts, the time taken for replacements to reach th

22 Renewable Energy

Sam Northcote-Green Renewable Energy Broker Lockton Global Energy & Power

Underwriting reaches profitability Whilst losses from natural catastrophes (NAT CATs) have continued to impact renewa

Background During the past five to ten years, renewable energy insurers reported considerable losses across their por

Market conditions Logic would indicate that with the influx of new capacity, and insurers desperate to develop market

2 Supply chain issues Alongside the increased cost of replacement parts, the time taken for replacements to reach th

Insurance Market Update - H2 2022 Lockton Companies LLP

It has become clear that none of these problems are going to be resolved in the near future and the insurers are we

Unfortunately, more uncertainty is predicted for the next twelve months, but we are expecting insurers to be put unde

For further information, please contact: Sam Northcote-Green Renewable Energy Broker Lockton Global Energy & Power E

For further information, please contact: Sam Northcote-Green Renewable Energy Broker Lockton Global Energy & Power E

It has become clear that none of these problems are going to be resolved in the near future and the insurers are we

Unfortunately, more uncertainty is predicted for the next twelve months, but we are expecting insurers to be put unde

For further information, please contact: Sam Northcote-Green Renewable Energy Broker Lockton Global Energy & Power E

Insurance Market Update - H2 2022 Lockton Companies LLP

Insurance market premiums up, but profits down Insurance in the Middle East and North Africa (MENA) region is steamin

Property The property market in the MENA region is starting to see a softening of terms and conditions when viewed on

reductions Decreases are being achieved in more subtle ways such as the re-emergence of two- to three-year agreement

Energy (oil & gas) In the oil & gas sector, market capacity has remained broadly stable As a result, rate rises in t

23 Spotlight on mena

David Way Senior Vice President Power & Infrastructure Lockton MENA

Naji Abboud Senior Vice President Head of Facultative Reinsurance Lockton MENA

Insurance market premiums up, but profits down Insurance in the Middle East and North Africa (MENA) region is steamin

Property The property market in the MENA region is starting to see a softening of terms and conditions when viewed on

reductions Decreases are being achieved in more subtle ways such as the re-emergence of two- to three-year agreement

Energy (oil & gas) In the oil & gas sector, market capacity has remained broadly stable As a result, rate rises in t

23 Spotlight on mena

David Way Senior Vice President Power & Infrastructure Lockton MENA

Naji Abboud Senior Vice President Head of Facultative Reinsurance Lockton MENA

Insurance Market Update - H2 2022 Lockton Companies LLP

Physical damage from a cyber event remains a subject of discussion As the push continues for definitive coverage pos

In the renewable energy sector, the insurance market is facing the challenges of new technologies, as well as a conti

Casualty general liability Casualty business in the MENA region has been enduring a soft market for a few years in a

doha skyline of the downtown in Qatar

Physical damage from a cyber event remains a subject of discussion As the push continues for definitive coverage pos

In the renewable energy sector, the insurance market is facing the challenges of new technologies, as well as a conti

Casualty general liability Casualty business in the MENA region has been enduring a soft market for a few years in a

doha skyline of the downtown in Qatar

Insurance Market Update - H2 2022 Lockton Companies LLP

The war in Ukraine has pushed cover to the forefront of all minds, but the truth is that political instability has re

Marine The marine insurance industry is heavily influenced by the current war in Eastern Europe, and many reinsurers

The fire resulted in a total loss of around 700 million This claim alone has led to higher premiums and less cover

This said, the market for directors and officers liability (D&O) has stabilized somewhat over the past year With r

Cyber The MENA cyber market has followed global patterns observed over the past 24 months, with increased premiums, h

Recommended insurance strategy Underwriters charge for uncertainty, so those making detailed submissions evidencing

For further information, please contact: David Way Senior Vice President Power & Infrastructure, Lockton MENA E davi

For further information, please contact: David Way Senior Vice President Power & Infrastructure, Lockton MENA E davi

Naji Abboud Senior Vice President Head of Facultative Reinsurance, Lockton MENA E naji abboud mena lockton com

Insurance Market Update - H2 2022 Lockton Companies LLP

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Get in touch To learn more about any of the information above please do not hesitate to get in touch with us Contact

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Alex Boswell Partner

E alex boswell lockton com

Christian Wuestner Content Director

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thanks for reading

Get in touch To learn more about any of the information above please do not hesitate to get in touch with us Contact

OLYMPUS DIGITAL CAMERA

Alex Boswell Partner

E alex boswell lockton com

Christian Wuestner Content Director

E christian wuestner lockton com

or alternatively, visit our website:

Insurance Market Update - H2 2022 Lockton Companies LLP

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