Renewals in the legal liability, marine cargo and engineering lines have so far developed in line with Market Report forecasts. Customers in the automotive supply industry in particular (recall risks) are, in some cases, being offered substantially inferior conditions by their insurers. In the wake of the volume of claims in recent years, a number of insurance providers are now taking greater account of actuarial considerations when it comes to portfolios and customers. These are often incomprehensible to customers and brokers, leading as a result to the termination of positive, long-standing customer relationships by insurers. From the customer’s perspective, such an approach by insurers generates an obvious and understandable loss of trust.

In the marine cargo line, as anticipated, insurers have indeed demonstrated a more restrictive underwriting approach. In particularly difficult economic times, it is unfortunately still not possible for insurers to accommodate customers’ expectations in terms of pricing. However, recourse to the entire global insurance market means it is even possible to take out insurance cover for the largest customers or the most serious risks.

In the predominantly project-related engineering lines, the number of annually renewable insurance policies is rather low. In this line, insurers are still offering sufficient capacities, in particular to provide cover for the numerous construction projects both in Germany and internationally. Risks that are fundamentally problematic in all lines of business (such as those associated with coal companies) also present major challenges for engineering insurers. Globally, too, insurers’ willingness to provide cover for these lines has declined significantly. Consequently, it can no longer be ruled out that the insurance amounts agreed in the past may no longer be available in full for this specific line. From an economic perspective, the restraint exercised by insurers – justified for environmental reasons – could have a serious impact, for example in the case of coal-fired power plants which, although still needed and in compliance with the very latest environmental requirements, will no longer be adequately insured. Policy clauses excluding pandemic and cyber threats are being demanded by many insurers, some of whom even refer to corresponding demands by reinsurers. The application and structure of various insurers’ new exclusion clauses should, in any case, be compared. A truly clear market standard has not yet developed in this respect. It can be the case that one and the same insurer providing cover for various lines of business is offering different clauses in these lines.

For those policies not renewed on 1st January 2021, the trend towards worsening insurance conditions – observed in almost all lines of business – is set to continue and is expected to gain momentum. The renewal strategy of insurers is also leading to excessive workloads for the insurers themselves. Legitimate questions from customers and brokers can no longer be answered. Offers are no longer being discussed by the relevant underwriters who point to the prescribed underwriting regulations and the associated workload. What’s more, shorter termination periods, e.g. shortened beyond 30th November, have categorically been refused for all customers in order simply to be able to manage the large number of policies under negotiation.