“We are also seeing some impacts on the recent weather events across New Zealand, with 10 events in the country in 2021 setting a new record of $325 million for weather-related events… D&O insurance cover continues to be front of mind for boards. While we have seen the trend of the past few years of substantial pricing increases and the reduction in cover/capacity start to lessen, there is not a downward trend in pricing or more capacity.”
According to Aon’s Q1 2022 Global Market Insights Report, the D&O market remained challenged for certain companies and industries in the first quarter. Additionally, further adjustments (albeit less severe) continued, despite the positive effect to insurer profitability of recent pricing increases and active management of retentions and limits deployed.
“Given these issues and the impact of the pandemic,” stated Chandler-Wall, “corporate clients and their risk and insurance advisors need quality data and information on all aspects of how the company manages risk so that insurers can assess them in the best possible light. The better the information, the better the outcome for our clients.”
Aon, a premier sponsor of sector and professional body RiskNZ, has around 70 branches across New Zealand. The broker’s corporate offering spans Accident Compensation Corporation claims management, cyber, D&O, employee benefits, human resource consulting, mergers and acquisitions, professional risks, property, retirement and investment, risk management services, and trade credit.
Globally, cited Aon in its market insights report, the cyber landscape remained volatile in Q1 while property continued to face woes such as increased frequency of catastrophic weather events, the impact of supply chain disruptions on the cost of construction materials, labour shortages not only in construction but also in transportation, and high inflation.
Chandler-Wall told Insurance Business: “It’s widely acknowledged that the pandemic has impacted global supply chains through the likes of both local and global material shortages, leading to increased pricing which then reflects in increased rebuilding costs, translating into increased insurance valuations. This then impacts on the available capacity within the New Zealand and London insurance markets as capacity is not infinite for insurers.”
In the UK and EMEA (Europe, Middle East, and Africa), for instance, underwriting in general remained stringent in the first three months of the year. This was largely driven by a continued focus on insurer profitability, supply chain challenges, and growing uncertainty related to the Ukraine-Russia conflict.
In Asia-Pacific, said Aon, quality underwriting information remained a key enabler of superior renewal outcomes. Meanwhile, it was highlighted that APAC capacity has expanded in some areas targeted for insurer growth while also stabilising across most lines, with the key exceptions of cyber and property exposed to natural catastrophe.
In New Zealand, where the corporate business team provides corporations and government organisations of any size with solutions and support across a broad range of key areas, Aon works to ensure that clients have the right insurance programme in place by leveraging the broker’s global insurance market access and international network of offices worldwide.
“Insurance continues to be very relevant for our clients no matter what sector they are in,” asserted Chandler-Wall, who has been with Aon since 2013, “so we are well placed to assist them in managing their risk. While we would like to say the impacts of the pandemic are behind us completely, the reality is that we all continue to have to manage this for the foreseeable future, so we are adapting just like our clients to ensure we continue to meet their needs.”