S'pore insurers see flat pricing in Q2 2024
Thanks to new market entrants amidst mixed trends.
Singaporean insurers' pricing was generally flat during the second quarter (Q2 2024), with a reduction in some products such as cyber and director and officers insurance where portfolio adjustments were made in the last few years during the hard market.
Automobile pricing saw increases due to insurer focus on profitability amidst a loss-impacted environment.
It was mainly due to their focus on top-line growth whilst underwriting for profitability. Additionally, Singaporean insurers were competing aggressively in some cases with a growth focus on new market entrants amidst mixed trends, according to Aon’s Global Insurance Market Insights report.
The insurance market had an ample-to-abundant capacity driven by healthy competition as new insurers entered the market and others expanded their appetite, with key exceptions being natural catastrophe Property risks, which experienced more limited capacity.
Underwriting was generally prudent with greater rigour on Automobile risks as insurers faced continued profitability pressure.
Most placements are renewed with expiring limits. However, in some cases like cyber where the previously challenging market conditions have become more favourable, insureds took advantage of the current conditions by reinvesting premium savings in the purchase of higher limits.
Most placements renewed with expiring deductibles, but Automobile placements experienced some upward pressure. Whilst most placements were renewed with expiring coverages, broader coverages were available in pockets, such as on cyber placements.
Singapore product trends
The automobile insurance market saw higher claims and other costs continued to impact market conditions and pressure profits, with new market entrants muting placement impacts, driving competitive pressure. Insurers implemented deductible increases to manage their exposure.
Complex and critical products/risks, as well as large placements with US exposures, remained challenging. Underwriters remained focused on rising global litigation trends and limit management through programme ventilation and capacity deployment strategies.
The cyber insurance market moderated following a prolonged period of challenging conditions. It also saw an increased requirement, driven largely by contractual and regulatory requirements for companies in the healthcare sector to carry cyber insurance.
Broader coverages were available, including full cover for ransomware-related losses for risks with strong cyber security controls and/or which underwent ISO certification. Some insureds were able to purchase higher limits at expiring premium levels.
Director and officer capacity remained abundant and competition for appetite risks was healthy. Whilst the market was soft, price reductions were more moderate than in the cyber market.
Insurers in the directors and officers market remained cautious when underwriting US-listed companies and capacity was limited for such risks. Insurers also focused on corporate responsibility risk management, with some willing to consider a reduction in deductibles for non-US listed, preferred risks.
Moderate market conditions continued in the Property segment, characterised by ample capacity and as-expiring renewal pricing and terms, with key exceptions including risks viewed as hazardous or those with unfavourable loss experience. Risk accumulation for key locations remained an area of underwriting focus, whilst long-term agreements returned to the market following prolonged unavailability.
Insurers also remained cautious on risks outside of Singapore, particularly in natural catastrophe-exposed geographies.