3 Carrier financial results and market update

Insurer results are based on 2019-22 company financial reporting, available industry information and Aon data.

* Cumulative year-to-date

Key carrier results

Preliminary financial results of the key credit insurers indicate a changing trend in 2022, following on from the COVID-19 period which was characterized by unusually low levels of loss.
Carriers saw overall top line revenue growth of over 15 percent reflecting both the significantly increased client trading activity post pandemic as well as the inflationary environment.
Levels of covered frequency claims ticked upwards through the quarters during 2022 with global insolvencies rising by +10 percent overall in the year, leading to higher annual loss and combined ratios being reported.
These ratios are now starting to return towards the typical range for this line of business whilst remaining below 2019 levels. As a result, the carriers operating results for 2022 year remain positive but saw a declining quarterly trend.
Even though we expect a continuation of the trend towards “normalization” of loss ratios as insolvencies inevitably return to the economic cycle, the impact and timing of these remains uncertain. Variations and revisions in outlook for the global economy mean that this normalization will happen in countries and trade sectors at different speeds and times.
The pricing environment reflects these current realities with overall renewal premium rates showing flat to low single digit reduction trends. Credit insurers continue with a pragmatic position on both their risk and commercial strategies, while reaching high levels of client portfolio retention.

Aggregate credit limit capacity from these key carriers is 20 percent higher than it was in pre-pandemic as insurers' appetite and capacity (Total Potential Exposure) have continued to increase to meet client needs driven by increased trading levels, higher commodity pricing and inflationary effects.
There were signs towards the end of 2022 that this exposure growth trend started to slow down as insurers prepare for a return to more normal underwriting conditions, reflecting uncertainty in the economic outlook and associated headwinds.
This expansion of exposure may continue at a lower rate during 2023, but there will be divergent sectoral and regional approaches matching realities as these unfold.
At the same time, the market at large continues to innovate through new specialist offerings and with the addition of new players who provide complementary capacity for more complex and larger risk exposures.

Insurer results are based on 2019-22 company financial reporting, available industry information and Aon data.