Geography Trends
EMEA and the United Kingdom
EMEA and the United Kingdom Q3 2021 Overview
See below for insights related to the landscape, market dynamics and claims dynamics in EMEA and the United Kingdom, or select a geography below to take a closer look.
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EMEA and the United Kingdom Landscape
The picture for Europe, the Middle East and Africa is, naturally, a diverse one. Europe’s governments have generally sought to recover from the impacts of COVID-19, relying on urgent vaccination campaigns to end the strictest lockdown measures and allow the virus to become endemic. The huge levels of government spending required to weather the crisis have been followed by pledges of long-term recovery plans including spending on infrastructure and renewable energy. The EU, for example, approved its EUR 750 billion collective recovery plan in June 2021.
Similarly, the wealthier countries of the Middle East are seeking to return to growth, with soaring energy prices likely to provide a boost to the oil-producing countries of the GCC. For the countries of Europe, on the other hand, spiralling natural gas costs present major economic challenges that will be exacerbated by delays, shortages and cost increases across global supply chains.
Official health data for the countries of Africa, meanwhile, have typically shown substantially lower mortality from COVID-19, but vaccine supplies have also been much more limited in these countries. This, together with lower capacity for governments to fund major recovery programs, makes prospects for recovery uncertain.
The insurance market is less stressed and there is more competition – especially as some insurers increase their appetite and capacity for targeted risk types.
Market Dynamics
Rates
Price increases have moderated across most of the market while Cyber and Financial Lines remain strained.
Capacity Capacity is sufficient for all but the largest risks and across the majority of lines of business (excluding Cyber). Contraction continues in some spaces but is offset by new entrants where appetite is expanding.
Underwriting Authority remains with central teams, resulting in increased rigor and stringency. Detailed information continues to be key to successful outcomes.
Limits Limit changes are primarily driven by exposure changes or insureds seeking premium tradeoffs, rather than required by underwriters.
Deductibles Cyber, Financial Lines, and Property deductibles are under pressure. Changes in other areas are primarily driven by insureds’ cost-management strategies.
Coverages Clarifications for Cyber and Pandemic have already been applied; other restrictions are imposed on a risk-specific basis rather than across-the-board.
Claims Dynamics
Challenging environment continues. Insurers are taking a tougher claims stance in general, and we are observing less flexibility and less inclination to execute on difficult decisions
Adjusting quality compromises are impacting clients: As adjusting firms seek to cut costs it appears that some are sacrificing technical quality and commercial thinking to the detriment of clients.
Legal involvement continues to create challenges and delays: On larger/complex losses we are seeing more external lawyer involvement, not always on the front end, but behind the scenes, providing support, which can lead to slower decision making, particularly in co-insurance situations.
Hard market conditions apply to claims too: Not only is the hard market affecting the way insurers quote risks but, also, the way some insurers are behaving in the claims management process. This is evidenced by frequent deferrals to “home office” for authority, excessive documentation requests, overuse of counsel and inexperienced internal adjuster involvement.
Proactivity helps ensure better outcomes: Clients should consider the following four key points relative to claims: (1) select insurers based on claims performance, (2) select adjusters on first party coverage lines based on global expertise, (3) understand your policy and (4) engage expert claims advocates early in the process.
