EMEA Q2 regional market trends

  • EMEA, like the rest of the world, faces ongoing economic uncertainty related to the global pandemic, with the implications of Brexit also yet to become fully clear. Many businesses continue to rely on government support to survive, and governments are investing unprecedented amounts of resources into the system.
  • Continued spikes in infection rates, recurring tightening of restrictions, and the expected rise in unemployment once the furlough scheme is closed have all impacted the outlook for growth and reduced the chances of a rapid recovery from worst recession in 300 years. It is now projected that the economy will return to its pre-pandemic peak in late 2022.
  • In the meantime, there is widespread anticipation of the COVID-19 vaccine rollout and various deals being struck across the region with vaccine suppliers. Business also continues to adapt to the new EU Brexit arrangements and trade barriers.
  • There has been some moderation of the difficult underwriting conditions seen in 2020. Risk pricing appears to have stabilised with nuanced increases for mid-market business and even some softening in the premium rate cycle as Insurer focus is beginning to shift from remediation to profitable growth whilst these conditions prevail.
  • Capacity constraints and Insurer attitudes of last year have now eased considerably whilst underwriters currently remain less flexible on accommodating business outside their core appetite.

EMEA: small to mid-sized national client placements

EMEA: large/complex/global client placements

APAC Q2 regional market trends

  • While some parts of the region — Australia and New Zealand — have returned to minimally restricted pre-COVID-19 norms and activities (including travel), others — India, Thailand, the Philippines, and South Korea — are experiencing spikes in infection rates as the race to vaccinate accelerates. Many borders remain highly regulated or effectively shut.
  • Broadly, the region is expected to grow in 2021; optimistic businesses and consumers are driving up forecasts which were higher at the end of Q1 than at the beginning. The cycle of optimism has led to a further surge in house prices with growth levels in some areas at 17-year highs.
  • Even as the region looks forward to a 2021 rebound, concerns remain. The strained trading relationship with China has led many firms to seek new or more diversified homes for their products. The workplace of the future will have fewer full-time on-site workers, leading employers to explore options such as job re-distribution to offshore, lower-cost regimes and acceleration of AI solutions.
  • Renewal rates are flattening for profitable business, with most insurers requiring one premium rate increase and then done, rather than consecutive years of increases at renewal.
  • Risk appetite has also increased albeit insurers are keen to minimise “air” in approved limits, requiring clients to manage credit limit requests to actual needs. Some sectors are thriving more obviously than others. Capacity is readily available including for concentrated risks, for example, consumer electronics & agritrade; whereas for the bunkering, metals & automotive sectors, it is typically more restrictive and more expensive.

APAC: small to mid-sized national client placements

APAC: large/complex/global client placements

AMERICAS Q2 regional market trends

North America

  • It’s a race against time as the public health crisis continues. COVID-19 vaccine eligibility expanded notably over the quarter; however, the virus is mutating, and variants are spreading. Despite ongoing health concerns, there is general optimism, and economic conditions are strengthening, as interest rates remain near zero with no meaningful hikes expected.
  • Multiple massive US economic stimulus bills — including the latest $1.9 trillion package in March — are creating positive impacts not only for hundreds of millions of direct US recipients but also for the North American and global economy at large. Strong performing sectors include Autos, Basic Materials, Finance, Retail, Construction, Industrial Products, Technology, and Medical.
  • This optimism is reflected in underwriters approach on risk being stable/open to most sectors and whilst there is some softening in rates. Insureds continue to explore changing insurance program architecture (e.g. higher deductibles) including excess of loss (XOL) and captive utilisation.

Latin America

  • The region is faced with volatility and uncertainty: rising COVID-19 infection rates and erratic government responses, the most significant GDP contraction of any region in the world, prolonged social tensions, and heightened political instability as the region anticipates upcoming elections in Argentina, Chile, Ecuador, El Salvador, Honduras, Mexico, Nicaragua and Peru.
  • While Latin America — with its need for infrastructure improvements related to transportation, logistics, energy, housing, and power — remains attractive to global investors, political volatility continues to dampen confidence, particularly for long-term investments. Economic, political, and social conditions are expected to slowly improve over the course of 2021 and 2022, but there is widespread uncertainty related to the course and timing, as the region awaits much needed structural reforms and a reprieve from the impacts of COVID-19.
  • Insurer risk appetite conservative, although, signs of this improving in those sectors and Countries that are first to recover. The increased economic and political volatility across the region has meant that the initial increase in appetite and capacity has slowed down.

AMERICAS: small to mid-sized national client placements

AMERICAS: large/complex/global client placements