With the hard market and global events bringing unforeseen challenges for insurers, there is no ‘one size fits all’ approach to Financial Lines and Cyber insurance in the DACH region. Risk selection and individual underwriting are crucial to be successful in the current market environment says Maximilian Moll, Branch Manager for DACH.
There are strong headwinds impacting the DACH regional Financial Lines and Cyber market this year, highlighting the importance of good relationships between insured and insurers, and on an individual and independent approach to risk advice and placement.
Not only are we still experiencing the impact of the pandemic, but there are also now increasing economic and financial sanctions on Russia over the country’s war in Ukraine - the effects of which will be far ranging, particularly on Germany’s energy and industrial sectors. The sanctions have also meant additional scrutiny of portfolios, identifying risks which have both direct and indirect Russian exposure - as well as changes in risk appetite and pricing.
The issue of increasing cyber risks is also coming under scrutiny - with the war in Ukraine creating fears of state-sponsored cyber attacks against European businesses, particularly supply chain businesses. As well as tightening capacity, cyber insurers are placing increasing emphasis on security measures and other risk mitigation measures such as multi-factor authentication to access systems as precursors to accepting a risk, for instance.
At the same time, the economic landscape across Europe is also rapidly developing towards a high interest rate and high inflation environment - leading to a potential impact on companies’ refinancing strategies and future perspectives.
Pre-existing challenges
These rapidly evolving dynamics add volatility to pre-existing challenges in the Financial Lines and Cyber insurance sector. The historical ‘10-year soft market followed by a two- three year hard market’ cycle has been displaced: the previous soft market lasted close to 20 years, and the ensuing hardening of the rating environment over the last 24 months seems to be stabilising again.
It is questionable if premium levels are high enough in order to compensate for a long soft market period, especially for products like Directors and Officers insurance. In turn, expectations are changing among insureds. Insurance buyers in DACH are placing more emphasis on the reliability of their insurers and their ability to respond effectively and promptly, particularly during the underwriting phase and in the event of a claim.
Relationships Matter
In an environment where the relationship between insured and insurer has become strained, the quality of the relationship is even more important. At Alta Signa, we continue to evolve and grow our business, with a stronger and larger team across Europe and the DACH region backed by a panel of five leading A-Rated capacity providers.
We take a long-term view of risk and relationships, and our tech-enabled, relationships-based approach helps us to add value in the current market environment where differentiation, relevance and having a strong value proposition, are key - something our experienced and technical underwriters can deliver.
We know the importance of having a strong and knowledgeable team. Not only does it help us deliver highly disciplined underwriting, but it ensures we can be flexible and serve our clients’ needs with the speed and quality they expect.
Last year, we opened our Munich and Vienna offices and work is underway to expand our team further with additional underwriters. We are also actively exploring opportunities in Switzerland, as well as developing our product range to broaden our portfolio.
Watch this space for further details! Meanwhile, get in touch with our team to discuss any of the above.