We are pleased to share our H2 2022 Insurance Market Update. This issue provides insights across 22 business segments and includes a spotlight feature on our MENA operations and the local trends in that insurance market.
The global economy is undergoing paradigm shifts that will have profound long-term political and economic implications on policy decisions. Commentators predict economic growth to slow significantly across the globe with inflationary recessions predicted in many developed economies over the course of the next 24 months. Insurers will have to combat rising claims costs, increased wage inflation and be pro-active with their reserving practices to ensure recent years corrective pricing action is not eroded.
The Atlantic hurricane season started quietly, with only three tropical storms to form by the end of August, the lowest number in nearly 40 years. However, storm Ian and other predicted storm systems have shown the volatile nature of the season, with September ending with significant property damage and tragic loss of life.
Despite these macro and global challenges, the insurance market has seen greater competitive opportunities for buyers, particularly for well managed risks with a compelling narrative around environmental, social and governance (ESG), strong risk management and good claims profiles. Cyber remains a significant outlier, with increased loss activity, shortage of capacity and minimum-security protocols making this a continued challenging market.
As noted in our April edition, there are several market signs that encourage optimism for insurance buyers in most coverage classes. However, this optimism needs to be tempered with ongoing and future global economic challenges that may lead to more caution amongst insurers as we move into 2023.