From: Captive International
The hard market is providing challenges and opportunities for captives, according to the latest AM Best sector report on the European captive insurance market.
Commercial insurers have continued to adjust insurance premiums upwards in 2023 to ensure that inflation is reflected in the price of cove, the rating agency said. These adjustments have been accompanied by increases in deductibles and other programme restructuring to adjust for increased asset values.
The inflation-related price adjustments in commercial insurance in 2023 follow significant premium rate adjustments put through since 2018, when the commercial insurance market started to harden.
According to the report: “Commercial insurers reported rate increase on top of rate increase, alongside a tightening of terms and conditions in the period since 2018. Casualty lines, in particular, experienced significant price increases, as insurers responded to the impact on loss experience of social inflation stemming from increased litigation and so-called ‘nuclear’ verdicts.”