London and international market update
As 2024 unfolds, in a number of classes of business, there are signs that we are at the top of the slippery slope into softer market territory as capacity chases income. This is not universal and many CAT driven risks, as described throughout this report, remain challenging.
Contrasted with last year, there was still turmoil among insurers at this stage as they tried to determine the impact of tough reinsurance renewals. There has been no such apparent dramatic impact this time. Reinsurers are encouraging increased uniformity of terms and can affect primary carriers’ business plans and target business.
More of the primary carriers are therefore quite likely to be chasing the same target business. A test of how well they have developed their respective approaches to distribution. Aggressive pursuit of new business, coverage broadening, limit increases, defending of market share, deductible changes, premium relief and more may well start to creep back in numerous lines of business.
Algorithmic follow carriers are supplementing available risk capacity. We are entering a phase of the market cycle that will test underwriter resolve and discipline. What will be the resolve of the algorithms?
A change in market conditions can encourage policyholders fatigued by “bad news” of year-on-year rate increases to blame their brokers and have the confidence to switch to an alternative. The same can be true of their approach to carriers. Unfolding market dynamics means new tensions are being created and need to be managed to best effect. Strategic and tactical communication with clients will therefore become even more valuable.
Typically, London reflects trends a good three to four months ahead of domestic carriers. Partly because of structure and being closer to the trades than larger public companies that understandably can take longer to respond.
In closing, we therefore encourage you to engage with the Miller practitioners who are in the market trading every day. The insight that they provide could help you win and retain more business.
