Geography Trends


This section includes insights related to:

  • Market Overview
  • Country Market and Claims Dynamics
  • Rate Trends
  • Three Featured Industries: Construction, Manufacturing, and Pharmaceuticals & Life Sciences

Featured Countries:

Select a country to read more

EMEA Q1 2021 Market Dynamics

EMEA Q1 2021 Claims Dynamics

EMEA Q1 2021 Rate Trends

Market Overview

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 resource 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.

Insurance Market & Key Risks

Pricing is tempering slightly: Market pricing continues to be significantly up; however, insurer focus is beginning to shift from remediation to profitable growth. As a result, there has been some moderation of the difficult conditions seen in 2020.

Some pockets remain particularly challenging: Directors & Officers, Cyber, Natural Catastrophe Property, and Contingent Business Interruption coverages, as well as construction, energy, food, and waste risks remain particularly challenging.

New pricing mechanisms are becoming more prevalent: There is a slow but steady migration toward alternative pricing models such as pay-as-you-drive, pay-how-you drive, price-per-minute (or kilometer), etc.

Appetite is focusing: Underwriters are becoming less flexible on accommodating business outside their core appetite.

Risk management / control is at the forefront: Insurers are increasingly imposing risk management / control measures as a prerequisite for offering favorable terms.

Regulators have driven industry changes: Activities of regulators - most notably through the UK FCA Business Interruption Test Case - have brought many issues to the forefront, creating both short- and long-term impacts.

Claims Environment

Insurer performance is solid despite a challenging environment: The claims environment is difficult, in part due to ongoing logistical challenges related to court systems. Social inflation and similar issues are driving cost in third party claims, and assessment of business interruption is a specific issue in the first party arena. Despite these complexities, overall claims performance across the industry for most lines of business remains solid, with valid claims being managed appropriately, albeit seemingly more slowly.

Centralized authority continues to be a trend: Decision-making authority is transitioning away from local branches to central teams, making local relationships less impactful while heightening the impact of executive relationships and claims advocacy.

Insurer cost containment measures may be detrimental: To manage costs, some insurers appear to be sacrificing quality in adjuster nominations and in other areas of expertise.

Tips for Clients

Provide robust information: Tell your story to underwriters with as much detail as possible. Differentiate your risk. Share what you are doing to manage and mitigate risk.

Start early: With a notable increase in information requirements and referral underwriting, the process is taking longer. Allow sufficient time to react to unfavorable insurer proposals.

Explore options: Establish priorities and consider tradeoffs such as alternative program structures, capital solutions, and rating mechanisms.

Review policy wording: Consider how your risk appetite and profile has evolved and work with Aon to ensure your coverage terms adapt to these changes.

Be proactive about claims: Leverage Aon’s insurer claims performance insights to inform your market selection. Familiarize yourself with insurer responsibilities and claim commitments. Work with Aon to secure claim coordination clauses / follow-the-leader clauses. Take an active role in the nomination of adjusters in first party lines. Engage specialized claims advocacy resources.

EMEA Featured Industries Q1 2021 Overview


Industry Issues After a COVID-induced slow-down in 2020, optimism has emerged and many 'paused' and new projects have resumed. Given that companies are looking to reduce office space as more workers work remotely, the residential sector has rebounded more quickly than the non-residential sector; some commercial projects remain on hold. The industry will benefit from large investments in infrastructure that are expected across the globe via government stimulus designed to dynamize the economies and generate jobs. However, there will be continued challenges related to elevated costs of materials from ongoing supply chain disruptions. The industry remains focused on supply chain simplification, transitioning to green techniques, expanding technology use, building a skilled workforce, focusing on targeted end-use, and delivering projects more collaboratively.

Market Conditions The construction industry has been hard hit by challenging market conditions, largely due to an extended period of poor loss experience. Capacity is limited for core construction products resulting in notable pricing escalation across Construction All Risks, Third Party Liability, Professional Indemnity, Surety, and Directors & Officers, as well as for risks with international exposure, and larger, layered, single project type risks. Appetite is stable with the exception of Professional Indemnity where there is a very narrow field of insurers, particularly for new business and/or single projects. There is a growing shortage of qualified underwriters in this space, and underwriting scrutiny is high, especially for complex infrastructure projects. While claims frequency has stabilized, insurers have become less cooperative and accommodating, and claims processing has generally slowed.

A Look Ahead As restrictions continue to lift across the region and projects delayed or deferred from 2020 will resume as stimulus packages materialize, the construction industry anticipates healthy growth. Contractor confidence is high – not only for a 2021 rebound but for a strong, longer-term bounce back as the backlog of projects grows. Current market conditions are expected to continue - with Professional Indemnity, Directors & Officers and larger, single project type risks experiencing the most challenging conditions.


Industry Issues As the industry bounces back from the disruptions of 2020, it emerges stronger, with myriad operational adjustments having been urgently made that position the industry for the future. However, challenges remain. There is a growing skilled labor gap, as the industry has shifted from traditional assembly lines to technology-driven operations which require a more tech-savvy workforce. Ongoing trade disputes threaten profits. And real-time, second and third level supply chain visibility, which has traditionally been difficult to track, is becoming a must. ESG assessments, independent from underwriting, are becoming a rule on peak risks. Market Conditions The insurance market for Manufacturing risks remains challenging, with pricing increases continuing, even for well-managed, loss-free risks. Appetite is narrowing, and underwriters are withdrawing capacity, particularly in the Natural Catastrophe Property space, where reinsurance has become more constrained. While many placements experienced mandated deductible increases at last year’s renewal, those that did not are seeing deductible increases now and are finding that the resulting premium offset often does not correlate to the additional risk assumed. Coverage terms – particularly for Business Interruption, Cyber and Communicable Disease are being clarified and/or restricted. Negotiations have become slower and more challenging, especially with insurers whose underwriting and claims functions have been centralized. Insureds are expected to evidence transparency and sound ESG practices and policies to achieve favorable results.

A Look Ahead Supply chain vulnerabilities will continue to be a key area of focus for the industry. Companies will look to optimize end-to-end operations, including adopting more sophisticated and proactive risk management practices. Political, Credit, and Cyber risks will draw increased attention as respects Risk Management and TCOR approaches. Investments will be made in project management to drive efficiencies, and on-the-job training to develop a skilled workforce. Insurance market pricing will continue its upward trend as insurers remain focused on returning to profitability. Underwriting scrutiny will continue. Aon’s Business Supply Chain Management consulting will remain a valuable tool for companies seeking help in this space.

Pharmaceuticals & Life Sciences

Industry Issues The pandemic provided a major opportunity for the pharmaceutical and life science industry. To fight the virus the industry developed solutions, ramping up production of PPE and ventilators early on, and then developing treatments and vaccines. Within a year, vaccines have been brought to market, through collaborative efforts (including with regulators), and are now being produced at scale. At the same time other medical services and treatments have been delayed, reducing demand in some areas and delaying product launches.

Market Conditions Despite a notable market adjustment during the 2020 renewals, pricing remains high for the current renewal cycle. Capacity is tight, but still sufficient in most cases, although more co-insurers are needed to complete placements. Coverage clarifications and exclusions are being imposed – particularly for Business Interruption. As the risk profile evolves across the industry, underwriters are scrutinizing every risk and underwriting escalation is common. A Look Ahead Overall, the pharmaceutical and life sciences industry is expected to grow annually by double digits in 2021 and well into the future – not only through continued COVID-related breakthroughs, but also through increasing demand for and approval of drugs for a population that is growing unhealthier and older, and through increasing investment in research and development. In the short run, the insurance market is expected to continue to be challenging, with rate increases, tight capacity and stringent underwriting approaches. Midterm, we expect a review of supply chains and outsourcing arrangements, as the need for large scale production and “vaccine nationalism” has demonstrated the interdependent nature of the industry. Longer term, as pharma risk profiles continue to morph, expect new, innovative solutions to accommodate the changing needs of this dynamic industry.