Less fever: this is the wish of risk managers for 2024. “Overall, compared to last year, we are seeing a stabilization of the market although there are still increases and/or tensions in certain branches”declares Alain Ronot, vice-president of Amrae (Association for corporate risk and insurance management) and co-pilot of the study Market status and outlook for 2024 presented Thursday October 26.
A stabilization which opens up optimistic prospects, but which still remains very fragile. “The outlook is uncertain, especially regarding the evolution of premiums, both in terms of rates and financial conditions, but also in the content of insurance contracts”, specifies François Beaume, also vice-president of the association and co-pilot of the study. Everything is not yet set in stone, with renewals still in progress for the most part.
An environment that remains tense
If uncertainties remain, it is largely due to the pressure exerted by reinsurers on insurers since last year, which affects ongoing renewals with final policyholders. This pressure can be explained by several factors according to Amrae: the geopolitical situation of many countries affects certain insurance lines, climate issues, as well as everything relating to digital in particular, continue to strongly influence the conditions of renewals .
“A number of lines – property damage, liability, automotive, construction and political risk – are particularly exposed to these upheavals”lists François Beaume. “Last year, we were in a tight market, this is less the case this year, but depending on the cases and types of coverage, the situation remains complex with capacity drops for certain branches”agrees Alain Ronot.
In property damage, everything related to exposure to natural events, political risks and terrorism, capacities are falling sharply. The situation is less critical in the civil liability branch.
In construction activity, the study reveals a drop in appetite for structural damage. Due to inflation, a rise in prices combined with a restricted supply constrains the automobile fleet and assistance line. These strong tensions are largely linked to the arrival of electric fleets, which are more expensive to purchase and in terms of repairs, leading to a mechanical increase in the automobile fleet market. Finally, a new point of tension is noted in credit insurance with reducing capacities, which has not happened since 2008.
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The arrival or return of a certain number of players on the French market such as Volante, Sompo and Everest makes it possible to bring new capacities, which is a good point. But nothing to gloat about since “per case, we see rather a reduction in capacity, with each insurer offering a little less overall”note Alain Ronot.
Nothing is therefore gained for companies. Although the contraction in capacity seems to have generally stopped, prices continue to increase beyond inflation. It is therefore line by line and company typology by company typology that the evolution of the market is analyzed.
“In general, we expect the increases to be less strong than last year, but we will remain on an upward trend all the same”recognizes Alain Ronot.
Business management efforts highlighted
Even more significant this year than last year, the quality of the subscription data transmitted by risk managers, the quality of the prevention and protection that are put in place facilitate negotiations with insurers. “We see that company risk managers are starting discussions with insurers and brokers earlier and earlier to try to influence the renewal conditions through the provision and explanation of these elements and thus part of a logic of long-term partnership with insurers” underlines François Beaume.
Companies’ risk prevention efforts are therefore better taken into account by insurers, but are not always enough to free up sufficient capacity on the insurance market. “This affects insurability and the premium rate, even capacity, but the prevention effort is only taken into account globally by the insurer. It is not because a company invests that it will automatically have the corresponding coverage”, explains Alain Ronot. Certain industries perceived as very exposed therefore find themselves in difficulty and are forced to turn to alternative solutions by creating captives, for example.
2023-10-26 18:25:10
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