In Australia, a softening of the pricing curve is being observed with more cause for optimism - Gallagher
For the directors and officers (D&O) market it is the first renewal season where risk and insurance managers are negotiating based on terms and conditions that were bound during the pandemic.
Whilst it is not yet possible to completely ignore the continued uncertainty, the market is ready to move on from COVID-19, concludes Gallagher in its state of the market report.
Market conditions in Australia saw premium increases and restricted underwriting accelerate in 2020 amid uncertain financial markets and economic conditions in anticipation of the impact of COVID-19 in 2020; prompting the need to review buying patterns and leverage of existing relationships.
At mid-2021 there is more cause for optimism with signs that insurers are willing to trade on new opportunities and, in many cases, on more adventurous program structures. Premium strengthening year-on-year has given insurers more confidence.
However, while the predicted wave of insolvencies has not yet emerged there is caution about the extent of harm for the economy if the largest cities continue to experience the uncertainty of extended lockdowns, notes the broker.
“Sector sentiment is a key challenge with insurers tending to apply a broad-brush industry response, regardless of the risk metrics and variable characteristics of each distinct entity,” notes the report.
“In these conditions, directors can be effectively differentiated to get better than sector outcomes though this takes real skill and finesse.”