All this is set to happen in 2023

Property insurance

In 2023, the industrial property market will see less focus on restructuring than in previous years, despite the fact that there appears to be no end in sight to the hard market phase.

The combined ratio for the previous year shows a significant improvement at 102%*. However, losses caused by natural hazards, higher rebuilding costs due to inflation, plus extended timeframes for reconstruction due to supply chain problems, all had a significant impact on loss expenses and prevented a better result. These factors remain at play in 2023, meaning that capacities will still need to be well managed and restrictions imposed as necessary. Risk quality therefore remains a decisive factor for insurers wishing to remain competitive. In the face of higher insurance values fuelled by inflation, insurers must keep a close eye on their prices; however, in the global market segment in particular, the desire to secure business portfolios – coupled with growing competition – looks set to have a bigger impact on insurers' pricing decisions in 2023 than previously.

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Liability Insurance

The liability insurance market is a heterogeneous beast, with differences observed from company to company. In particular, in 2023 the market looks set to remain tough for companies with complex risks (e.g. automotive suppliers, chemical and pharmaceutical industries, medical device manufacturers and companies with high US risk). When renewing their policies in 2022, insurers of these companies opted for a raft of measures, including increasing premiums, adjusting policy deductibles and restricting the scope of cover. Moreover, companies with complex risks are feeling the impact of the reduced capacities of some insurers.

Many insurance providers see industrial companies in the middle to upper-middle markets as a growth area for 2023, with risk quality and technical risk assessments becoming ever more important factors in determining insurers' appetite for risk. At the time of writing, we are expecting to see more moderate rises in premiums in 2023, with insurers justifying these on the grounds of inflation and increased losses, in particular with regard to US risks. Higher loss expenses are also leading to even gloomier worst-case scenarios for companies, making it all the more important to ensure that companies are purchasing sufficient cover for their needs.


2023 will be an exciting year for all stakeholders in the D&O market. Competition between insurers looks set to continue, likely bringing falling prices in its wake. The market, meanwhile, continues to contend with external factors, such as the fallout from COVID-19, inflation, supply chain issues and the energy crisis, all of which increase the likelihood of insolvency-related D&O claims. These external influences also continue to pose a challenge when it comes to estimating the scope and costs of D&O insurance cover. The tumult surrounding the loss ratios for D&O insurers has now abated since the German Insurance Association (GDV) made the necessary corrections to its D&O statistics in October 2022 (including retroactively for previous years). Risk carriers are now venturing into more new business and competing in larger numbers to head up large D&O programmes. A growing number of international insurance programmes are also being offered for multinational corporations, and it is once again possible to negotiate multi-year policies. These policies give greater planning certainty, but it is important to weigh up the benefits as some premiums (still) remain high. Insurers assess the quality of a company's D&O risk on a case-by-case basis using risk factors such as their industry and the nature of their international business operations. They then use this assessment to set the company's premium, the sums insured and the scope of their insurance cover. In some cases, risk carriers' own underwriting guidelines in terms of their environmental policy and ESG (Environmental, Social, Governance) targets can mean capacity shortages (e.g. coal-fired power plants). Good market access and the strategic and transparent exchange of information between market stakeholders therefore remain key factors in ensuring the best possible D&O insurance provision.

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Cargo Insurance

At the start of 2023, cargo insurers looked to adjust their conditions and amend their prices in response to inflationary pressures. As a result, premiums in the sector have risen slightly – by around 5% on average. Some insurers are writing exclusions into their policies to cover the shipment and storage of goods to, from, through and within Ukraine, Russia and Belarus. This development may leave some customers with significant gaps in their cover. Customers are especially critical of insurers' blanket approach, rather than assessing cover on a case-by-case basis. However, provided sanction checks are carried out, brokers are able to waive certain exclusions for specific shipment operations and routes. Industries dependent on raw materials – where supply chain issues and price increases have significantly increased the sums insured (particularly for marine transport) – can expect to see higher premiums in future. For capacity reasons, excess clauses will also become increasingly prevalent in cargo insurance policies. In certain sectors, these same capacity concerns will mean international primary and reinsurance markets will have a role to play in placing insurance policies.

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Construction and engineering insurance

Most sectors are showing no signs of general price increases. However, for policies with a high loss ratio, insurers will be looking more consistently than ever to increase prices and deductibles or restrict terms – even if they risk losing the policyholder as a result. The insurance capacities provided continue to be sufficient. However, the placement of cover for more complex risks, such as offshore projects, undersea cables, gas turbines and coal-fired power plants where the maximum potential loss is high, remains a major challenge. Against the backdrop of generally negative loss experiences, insurers are tending to offer lower underwriting shares and are also trying to keep prices high and/or limit the scope of cover. The same trend is also being observed in the case of traditional building projects, refurbishment and renovation projects and industrial plants where, again, the maximum potential loss is high. Good risk transparency and access to top-class markets are becoming increasingly important factors when it comes to insuring these complex risks.

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Terrorism insurance

In 2023, the Russia-Ukraine war will continue to impact on terrorism insurance and political violence insurance in particular. Losses sustained over the past year as a result of the war have led some insurers to restrict capacity or even withdraw from the market completely.

2023 will likely be marked by further unrest as a direct consequence of the war and the rising inflation it has brought in its wake. Terrorism insurance premiums always depend on the current economic and political situation in any given country. We can therefore expect some insurers to further reduce their capacity and for premiums to rise overall. In addition, insurers are placing greater scrutiny on the ESG (Environmental, Social and Governance) credentials of the companies they insure. In future, companies that fail to meet (or only meet some of) their insurer's ESG targets will therefore increasingly encounter restrictions on the level of cover available to them.

* Industrial property insurance, extrapolation for 3rd quarter 2022, source: GDV