Marketplace Realities GB - Willis Towers Watson...International Property – Australia & New Zealand +15% to +30% (cat exposed/distressed classes) ... Marketplace Realities GB, Blackjack

Marketplace Realities GBBlackjack

August 2018

Marketplace Realities GBBlackjack

International Property

05

Motor

28Terrorism and Political Violence

27

Aviation

21

Contents

Downstream Energy

12Upstream Energy

13

Property (North America)

04

Marine Cargo

18

Executive Summary

03

Facultative Reinsurance

08UK Property / UK Multinational Property

07

29

Trade Credit

25Construction

23

Natural Resources Casualty

14Environmental Impairment Liability

15

Financial & Executive Risks

Political Risk and Trade Credit

26

32Willis Towers Watson – Market Security Group

Cyber

16

International Casualty

10

31Product Recall

Price Predictions Summary

Downstream Energy Flat to -2.5% (+5% if cat-exposed/loss affected)

International / UK Casualty Flat to -5%

Cyber Flat to -2.5%

Facultative Reinsurance – North America Flat to +5% (+20%> if cat-exposed/loss affected)

Facultative Reinsurance – Caribbean +15% to +40% (cat exposed/loss affected)

Facultative Reinsurance – Europe Flat to -10% (+10% if cat-exposed /loss affected)

Marine Cargo Flat to +5%

Marine Hull Flat

Marine Liability Flat

Aviation – Aerospace Flat to +5%

Aviation – Airlines Flat to +10%

Aviation – General Aviation +15% to +40% (Rotor Wing)

Aviation – Financial Institutions / Leasing Companies Flat to -5%

Motor + 5% to +10% (+20% for large programmes)

Trade Credit Flat to +5%

Political Risk and Trade Credit Flat

Specie Flat

Construction Flat (+5% to +50% if cat-exposed)

Terrorism & Political Violence Flat to -5%

Natural Resources Casualty Flat

Environmental Impairment Liability Flat to +2.5%

Property (North America) Flat to +10% (+10% > cat exposed / loss affected)

Flat

+200%

-20% UK / UK Multinational Property -10% to - 20%

International Property – Australia & New Zealand +15% to +30% (cat exposed/distressed classes)

International Property – Asia & Middle East Flat to -15%

International Property – Latin America -5% to +20% (heavy industry/cat-exposed risks)

International Property – Caribbean Flat to +200% (loss affected/major capacity-driven accounts)

Facultative Reinsurance – Latin America +5% (+20%> if cat-exposed and loss affected)

Aviation – Space Flat to -10%

*For further detail and commentary on Financial & Executive Risks see page 29 of the report

Financial & Executive Risks* – Professional Indemnity +5% to +15%

Financial & Executive Risks* – D&O +50% to +100% (loss affected)

Upstream Energy Flat to +5%

Product Recall +2.5% to +5%

How insurers would welcome a return to the ‘tit for tat’ approach to insurance pricing in the manner that currently consumes world trade policy. As the established rule book is ripped apart, efforts to address poor profitability in many insurance disciplines using straightforward ‘tariff’ increases have largely failed to take hold in the manner originally prescribed.

The retaliatory response to raise the stakes after record global insured losses in 2017; the highest ever recorded in a single year, has largely run its course. Mindful of industry capitalisation, alternative capital and broader challenges to the status of the UK market, insurers have toned-down their rhetoric and held their cards. Void of an overnight Tweet announcing a more accommodative rating environment, insurers are now fixated on remediating underperforming lines and tackling rising expense differentials using tools within their control.

Under pressure from The Corporation of Lloyd’s to improve profitability, where concerns over continued underperformance could threaten the integrity of the Central Fund, its rating and brand, some Syndicates have acted decisively to remediate, restructure, sell or even close down their most unprofitable lines. While not administered as publicly, similar business improvement efforts are under way across the industry. These difficult yet necessary actions to protect long-term continuity are admirable. While such measures are unlikely to materially impact the availability of capacity in the short term, combined with other strategies including M&A activity, they demonstrate the desire to remain relevant and present at future trade negotiations.

A measured and pragmatic line must now be taken by insurers to; on the one hand, socialise the need to be paid appropriately for the exposure assumed, and on the other hand, recognise the choice that clients have across the global marketplace. Any tactical gamesmanship or overly ambitious decision to ‘twist’ the hand that has already been dealt, will be rebuffed by clients, lead to a collapse in talks and ultimately; ‘no-deal’. This situation must be avoided if the London Market is to remain a permanent member at the table.

Clyde Bernstein Head of Broking, GB +44 (0)20 3124 6338 [email protected]

Executive SummaryBlackjack

Marketplace Realities GB, Blackjack - August 2018 3

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Demand for double-digit rate increases has reduced, although there continues to be a desire for upward rate movement.

Lloyd’s continues to express the need to increase rates to more sustainable levels, especially for catastrophe-exposed risks.

Lloyd’s syndicates would like to challenge deductible levels especially on accounts with attritional loss experience.

Occupancies such as Dealers Open Lot, Primary Habitational and Waste Management are problematic and attract increased prices and more restrictive terms.

Company marketplace remains more pragmatic for clients, in line with their domestic peers.

US insurers are showing some signs of being more cautious in their deployment of capacity and preferred attachment point.

While main hurricane prognosticators forecast near normal or slightly below normal hurricane activity for the 2018 hurricane season, another active Atlantic hurricane season would only serve to toughen the trading environment.

Property (North America)

Non-cat: 0 to +5% (occupancy dependent)

Cat-exposed, loss-free: +5% to +10% Large cat-exposed, loss-affected: +10% and upwards

Price prediction

The one thing

Early client engagement and broad market reviews are recommended to provide the best opportunity to challenge existing solutions and markets or validate incumbent renewal terms

Contact

Angela James North American Property, Property & Casualty CoE T: +44 203 124 6974 E: angela.james @willistowerswatson.com

4 willistowerswatson.com

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Australia & New Zealand

The Australian Food & Beverage and Waste sectors are proving challenging for local markets, which are contracting.

The London Market is offering solutions while maintaining technical underwriting for distressed clients that need to maintain coverage.

Capacity availability and business have shifted to Lloyd’s as demand for capacity remains high.

Risk quality and profile of business being presented vary greatly.

Distressed risks with ‘sandwich’ composite panelling or polyurethane foam insulation (PUR) exposures are attracting 30% plus rate increases.

Loss-free Pacific Islands resort and beachfront businesses are attracting average rate increases of 15%.


Asia & Middle East

Asian markets continue to have a strong appetite for business, which is maintaining downward pressure on ratings.

Between 10% and 15% rate reductions are being observed on loss-free Korean and Taiwanese renewals respectively.

Flat rates are generally being applied to accounts with loss activity.

Marked reduction in the degree of rate reduction achievable in the Middle East with reductions now averaging between 8% and 10% on loss-free business compared to 20% a year earlier.

Price prediction

+15% to +30%

Price prediction

Flat to -15%


Caribbean

Mixed results were achieved through the major renewal season.

Natural catastrophe exposed accounts received wide variance of increase depending on loss history, size of account and occupancy.

Unaffected islands and low exposure risks achieved flat to small increases in premium.

Increases of greater than 200% have been seen for major capacity-driven placements.

Some withdrawal of capacity for beachfront exposure.

Increased self-insurance or reduced-limit purchase as clients consider their response to rate increases.

Lloyd’s remains competitive in some islands.

Benefit in purchasing early has proved an intelligent strategy as ‘late comers’ have suffered greater increases as (re)insurers’ aggregates are filled.

Latin America

Inevitable differences between local, regional and international market rates and response in the aftermath of the 2017 catastrophes and general trading environment.

The international market is trying to capitalise post 2017 catastrophes.

Other than the most capacity-demanding accounts, desired improvements in pricing are failing to materialise.

Marked differences in rating, terms and conditions between the Caribbean and Latin America.

Occupancy and capacity demand continue to influence market response:

Lighter exposure risks continue to attract discounts in local insurer markets

Upward pressure on rates of between 10% and 20% for heavy-industry and catastrophe-exposed risks

Difference in perspective between regional and London reinsurers

London market more steadfast in resisting rate reductions and looking to increase rates including some territories without natural perils exposure

Insurer acknowledgement of the rating opportunity and improved returns available in the Caribbean with a noticeable shift of interest from Latin America to the Caribbean.

Price prediction

-5% to +20%

Price prediction

Flat to +200%

The one thing

Available capacity and risk appetite amongst insurers continues to fluctuate depending on geography.


Contact

Ara Demirdjian International Property, Property & Casualty CoE T: +44 203 124 8688 E: ara.demirdjian @willistowerswatson.com


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No general rate increases across the UK Property book during the first half of 2018.

Property insurers who suggest they cannot allow rate reductions on their renewal book are in the minority, with many alternative markets prepared to consider an alternative solution.

Some reductions of up to 20% for accounts that have not been marketed for two or three years.

A portfolio approach to the marketing of insurance coverage often achieves the best result as insurers look to ‘institutionalise’ their relationship with clients across all lines.

Opportunities to enhance and broaden coverage remain, although there has been a noticeable trend among some insurers to review Cyber exposures under Property programmes.

Some London underwriting platforms have been closed by Global insurers as they re-evaluate underwriting appetite and strategy.

Regional markets remain highly competitive in Property and Casualty with reductions experienced of up to 20%.

Some firming of insurer attitudes towards claims in the Property and Casualty sectors with insurers paying closer attention to policy language and the basis of cover at the time of loss.

Some reduction in appetite in the Food and Drink sector brought about by large losses with composite panelling exposure.

Price prediction

-10% to -20%

The one thing

Professional preparation and adequacy of insured values along with careful reviews of Policy Wordings are crucial to ensure coverage accurately reflect the client’s needs.

Contact

James Pierce UK Property, Property & Casualty CoE T: +44 203 124 8479 E: [email protected]

Lucy Taylor UK Property, Property & Casualty CoE T: +44 117 976 9324 E: [email protected]

UK Property / UK Multinational Property


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Noticeable inconsistency in the marketplace post Hurricanes Harvey, Irma and Maria.

Brokers are exploiting competition that exists between various global placement hubs.

Greater willingness to split up large global programmes along geographical lines.

Global insurers seeking to push ‘across the board’ rate increases have been countered by local insurers (unaffected by 2017 catastrophes), seizing the opportunity to recover market share and competing with their larger counterparts by utilising the reinsurance market strategically.

As a result, the convergence of the insurance and reinsurance markets has been even more pronounced in the first half of 2018 where markets missing out on direct placements have registered increased willingness to participate on reinsurance placements.

Non-proportional placements are on the rise after the trend of clients in recent years to purchase proportionally. Some of this has been driven by reinsurers looking to secure better rates on line for heavy natural catastrophe business as they compete with their internal treaty reinsurance teams for catastrophe aggregate.

Clients are looking for more than simply placement services; with increased levels of sustainable, strategic and analytics-driven purchasing, resulting in a greater number of portfolio solutions being placed in the Facultative market.

Despite greater demand for emerging risk solutions, capacity remains limited and pricing prohibitive when compared against the relatively competitive direct programme.

Facultative Reinsurance


Caribbean

Non-affected islands:

+15%

Loss-affected islands:

Upwards of +40%

Price prediction

North America

Non-cat:

Flat Cat-exposed:

+5% for heavy exposures on primary participations Flat for heavy exposures on an excess of loss basis Upwards of +20% if loss-affected

Europe

Non cat / non loss affected

Flat to -10%

Latin America

Non cat:

+5%

Cat-exposed:

+10% to +15% if no lossesUpwards of +20% if loss-affected

Cat-exposed:

Flat if no losses Upwards of +10% if loss-affected

Contact

Akshay Reddy Facultative Reinsurance T: + 44 203 124 8267 E: [email protected]

The one thing

The reinsurance market has a role to play in enabling insurers to offer meaningful solutions to clients for emerging and uninsured risks, as the gap between economic and insured losses remains large. Creative reinsurance solutions may well drive the shift of capital from more saturated classes into less developed areas.


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Overall market capacity is stable and insurer appetite for well-managed risk business remains high.

Merger & acquisition effects are not expected to be felt until Q2 2019 at the earliest.

While loss portfolios resulting from the 2017 catastrophic events and US auto fatalities are adding pressure on the market to increase rates, widespread increases have not materialised.

Reduced capacity on single-location risks and/or targeted industries such as rail operators and waste management.

Renewed focus on retention and greater selection around new business are aimed at improving future profitability.

Efforts to review and tighten coverage scope, particularly on broad casualty forms that incorporate cyber and professional liability.

The Life Science sector is experiencing rate reductions in excess of 10%, driven by increased competition among a number of specialist insurers.

UK casualty:

Flat to -5%

Price prediction

The one thing

Early engagement with the incumbent market and identification of competing markets will yield the best deals and avoid unpleasant surprises.

International casualty:

Flat to -5%

International Casualty

Contact

Thomas Wright International Casualty, Property & Casualty CoE T: +44 203 124 8719 E: thomas.wright@ willistowerswatson.com


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The sector continues to experience an oversupply of capital with minimal impact from the withdrawal of a major reinsurer based in Dubai during the second quarter of 2018.

Major losses continue to have an impact on the market with two significant incidents occurring in 2018: a catastrophe in the Pacific affecting an LNG facility and a fire/explosion at a refinery located in the US. These two losses alone are estimated to cost USD 1 billion.

During the first quarter of 2018, onshore energy insurers achieved small increases on loss-free business following management protocols regarding renewal rates post Hurricanes Harvey, Irma and Maria in 2017.

Greater rate increases were imposed on loss-affected business with catastrophe exposure.

Slight relaxation from some markets post 1 April, where clients with good loss records and risk management were able to achieve flat renewals.

It is possible to achieve small reductions when subjecting the insurance programme to restructuring and re-marketing.

Loss-affected business with catastrophe exposure continues to attract rate increases, but at a more measured level than six months ago.

Facultative Reinsurance is playing a part in supporting alternative risk-transfer solutions and aiding commerciality.

Excess of Loss reinsurers in the Middle East are reluctant to reduce pricing and are adopting a steadfast approach to achieving adequate returns for the capital deployed.

Downstream Energy Price prediction

The one thing

With surplus capacity in the Downstream Energy sector, it is possible to negotiate agreeable terms with incumbent insurers, preserving continuity of relationships for future renewals.

Loss-free, non-cat:

Loss-affected, cat-exposed:

+5%

Flat to -2.5%

Contact

Steve Gillespie Downstream Energy T: +44 203 124 8515 E: steve.gillespie @willistowerswatson.com


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Upstream Energy Price prediction

The one thing

Increased Merger & Acquisition activity will ultimately result in the consolidation of market capacity.

Contact

Richard Burge Upstream Energy T: +44 203 124 6462 E: [email protected]

* excludes Gulf of Mexico Windstorm

There have not been any significant upstream losses during 2018

Market capacity remains at an all-time high with an estimated ‘working’ capacity of *USD 6.5 billion for best of class programmes without aggregated clash exposure

Limited withdrawal from the sector with only one Middle Eastern insurer exiting the class

Business plans for Lloyd’s Syndicates under greater scrutiny as Lloyd’s looks to improve its performance across all lines

Greater oversight by management around risk selection with a growing number of insurers prepared to decline business where terms and conditions are deemed inadequate

Overcapacity in the Upstream Market restricting insurers’ ambition to increase premium rates significantly as market competition and choice remain

Flat to plus +5%


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Suggestions of rate rises by certain liability markets have, in the main, failed to materialise during 2018.

The rating environment in the liability market has largely bottomed out.

Flat renewals are generally the standard.

Changes in exposures are now attracting risk-adjusted premium increases whereas these were previously consumed within overall contract negotiations.

Many insurers are ‘cleansing’ their portfolio to promote technical adequacy, with particular focus on distressed and loss-affected lines.

Changes in reinsurance buying strategy, reinsurance conditions and better aggregation control have led a number of major primary insurers to significantly reduce primary participation.

Overall market capacity remains constant at approximately USD 3.3 billion.

This remains a wide range of choice in the market with options prepared to offer alternative terms.

Increased pressure is being experienced to exclude certain coverage, particularly Cyber.

Natural Resources Casualty

Price prediction

Flat

The one thing

As insurers focus attention on rate adequacy, there is heightened importance for clients to demonstrate risk quality and provide salient risk exposure information.

Contact

Mike Newsom-Davis Natural Resources, Casualty T: +44 203 124 6053 E: mike.newsom-davis@ willistowerswatson.com


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Insurers continue to offer broad coverage for complicated risks.

Appetite for pipeline operation and off-shore risks remains limited with capacity and aggregation potentially an issue as we move towards 2019.

Mexico and Colombia are actively including Environmental Impairment Liability within Permits for off shore hydrocarbon prospecting and production.

Contractors Pollution Liability are increasing in popularity as this can be a short-term risk transfer allied to Contractors All Risk programmes.

Lloyd’s and company markets remain the leaders in this class of business.

Rates on simple renewals remain steady although minimum rating for ten-year policy periods have incurred a small increase of up to 2.5%.

Risks on a three or five-year term are carrying rates of up to 50% lower than 2013 levels but a vast improvement in risk engineering explains some of this reduction.

Insurers are now paying close attention to combined General Liability and Environmental Impairment Liability offerings across the rest of the world.

The Environmental Impairment Liability sector continues to struggle to offer meaningful off-shore wordings, although the sector is expected to grow as more insurers enter it.

Environmental Impairment Liability

Price prediction

Flat to +2.5%

The one thing

Knowledge of the appropriate coverage, conditions and limitations for off-shore policy wordings is vital to achieve the right outcome for clients.

Contact

James Alexander Environmental, Property & Casualty CoE T: +44 203 124 6845 E: james.alexander @willistowerswatson.com


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Awareness of Cyber Risk exposure increased during the first half of 2018 with 80% of company Boards listing Cyber Risk and Information Security as a standing Board agenda item.

Financial and Reputational risk are cited as the most important reasons for Board oversight.

Take-up of insurance increased through a combination of higher limits from existing and new buyers, particularly non-US domiciled companies.

Cyber renewals for both primary and excess insurance cover remain competitive with increased competition continuing to drive pricing and enhanced coverage.

Insurers are willing to offer bespoke industry-specific coverage and solutions to reflect differing exposures and client needs.

While the General Data Protection Regulation (GDPR) came into force in the European Union in May 2018, there remains a large degree of uncertainty around the insurability of fines prescribed under the Act.

Insurers are increasingly interested in client GDPR preparedness although restrictions have yet to be seen on insurance coverage.

Increased legislation across the globe relating to data protection and specific regulations such as the Network & Information Systems Directive (NISD) aimed at digital service providers (DSPs).

It remains to be seen what direct impact these regulations will have on insurance cover and claims activity.

Policy coverage continues to evolve, particularly in respect of exposure to outsource service providers (OSP) and digital supply chain issues.

Cyber

Reliance on third party providers has become a key issue for most companies.

While some insurers are able to offer broad and innovative coverage in respect of third party providers, insurers are concerned about potential aggregation risk relating to an OSP issue impacting multiple companies, industries and geographies.

Insurers have continued to focus on potential ‘silent cyber’ exposure in traditional insurance coverage with insurers looking at such exposures more closely.

Cyber claims activity has increased in the first half of 2018.

Growth of the insurance market and increased regulation are anticipated to result in increased claims frequency.

Ransomware remains the top cause of loss for Cyber claims with resultant business interruption being the key business impact.

Overall market capacity increased through a combination of increased appetite from existing insurers, new entrants and Managing General Agents.

Many insurers are offering more than USD 10 million on any one risk with some insurers able to assume up to USD 50 million.

Limits of up to USD 750 million are available from the global market for a single risk.

Insurers are willing to offer bespoke industry-specific coverage and solutions to reflect differing exposures and client needs


Price prediction

Renewals:

Flat to -2.5%

The one thing

Cyber insurance should be considered as an important part of an organisation’s overall approach to mitigating the financial and reputational impacts of a Cyber incident.

Competitive market conditions depending on industry and size of company

First-time buyers:

Contact

Glyn Thoms Professional Risks, PI T: +44 203 124 8673 E: glyn.thoms@ willistowerswatson.com


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Some reduction in capacity after several markets pulled out or reduced maximum participation.

Pharma and temperature-related risks are under scrutiny and remain sensitive industries within Marine.

We are seeing reduced coverage for process clauses and misappropriation.

Management are scrutinising the cargo portfolio with greater emphasis on the ‘bottom line’.

Sign-off for more complex classes such as cars is undergoing a lengthier and more rigorous management approval process.

Marine Cargo

Non cat-exposed accounts:

Flat

Cat-exposed:

Upwards of +5%

Price prediction

The one thing

The London Cargo market is experiencing a considerable shift. It remains to be seen if this results in a loss of market share or whether the challenges begin to impact the global market.

Contact

Alex Poole Marine Cargo E: [email protected]


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Considerable change in the Hull & Machinery market where good-quality, loss-free business now attracts a flat rate compared to average reductions of 10% in recent years.

Some Lloyd’s syndicates have pulled out of Hull & Machinery, with an anticipated impact on underwriting sentiment and strategy of other Hull underwriters.

Lloyd’s Decile 10 and Remediation Plan is expected to result in further casualties and withdrawal of capacity from the market.

Lloyd’s stance of refusing reductions in ‘technical rating’ has been somewhat countered by Norwegian markets who have made profits and are considered to be strong alternatives.

Longer-term deals are becoming difficult to achieve, with overseas markets in Europe and Asia generally more competitive than London.

Marine Hull

Price prediction

The one thing

Surrounded by the threat of closure without a clear and credible plan to improve profitability, the Lloyd’s remediation plan will bring greater underwriting discipline into the Marine Hull market.

With no material reduction in capacity, premium reductions remain achievable through careful planning and remarketing

The stand-alone Marine Liability market has remained relatively unchanged, in part due to running a better loss record than other areas, particularly Marine Property.

Marine insurers who avoided Property losses and predominantly wrote Marine Liability risks have been better positioned to compete for liability business.

Increased chance of some capacity withdrawal over the next 12 months.

Marine Liability

The one thing

Stand-alone Marine Liability remains a favoured interest within the Marine market.

Price prediction

Mainly stable, with some premium increases, partly influenced by some reductions in capacity

Contact

Mervyn Tucker Marine Hull T: +44 20 3124 8319 E: [email protected]


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Ports and Terminals

Losses for Marine Property following the 2017 catastrophes have materialised at higher levels than originally anticipated, with premium increases closer to 20% or greater in the highest catastrophe areas, compared to 10% previously experienced. Some losses have been sufficient for insurers to re-evaluate their Marine Property portfolio altogether with certain insurers prepared to lose their competitive edge to domestic insurers in the search for increased premiums. Premiums on Port and Terminal ‘Liability’ risks remain fairly stable.

The one thing

Property remains the volatile influencing factor that affects profitability in the Ports and Terminal market.

Price prediction

Increases in rates for Port Property risks located in catastrophe zones average between +10% and +20% depending on claims record

Liability premiums are anticipated to remain flat

Specie insurers continue to review their portfolio as Jeweller’s Block and Cash in Transit classes remain a concern from a performance perspective.

Some syndicates have decided not to write Cash in Transit business in Brazil, Mexico and Italy as past experience has lead to more careful consideration of the risk and return reward.

Fine Art and General Specie sectors remain profitable and the preferred lines for insurers looking to write a more balanced portfolio.

We are seeing greater focus on insurance contract wordings with resistance to the inclusion of ancillary or add-on coverage without the commensurate increase in premium.

Ample capacity in the market for most Specie risks although tighter restrictions have been imposed in natural catastrophe regions.

Specie

Price prediction

FlatContact

Nigel Cassey Marine Special Risks T: +44 203 124 8586 E: [email protected]

Contact

Jonathan Ballard Fine Art, Jewellery & Specie T: +44 20 3124 6828 E: [email protected]


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Airlines

The fourth quarter of 2017 experienced a definitive change in approach by the Aviation market. The soft trading dynamic has now changed and underwriters have greater control of both the rating and pricing of risks.

Passenger and fleet growth is now amounting to an additional premium for (re)insurers with additional risk no longer being consumed within the original premium.

Airlines with poorer claims records are seeing larger underlying rating increases.

Low-cost insurers and airlines operating ‘narrow-body’ aircraft fleets (with exposure growth) are still receiving the most favourable renewal terms.

2018 major airline losses are deemed to have already surpassed 2017 levels in terms of frequency and severity.

Recent merger & acquisition activity is dominating the market capacity debate and landscape. How this manifests in the airline sector remains to be seen, but there has already been some reduction in both markets and capacity in the airline sector.

Aviation

Price prediction

Flat to +10%, depending on claims record, exposure growth and limits purchased


Aerospace

After a soft market cycle of unprecedented length, conditions are now showing signs of changing, but the availability of capacity continues to mitigate any significant impact on pricing.

Insurers are reviewing rating levels carefully, with most having restricted underwriters to offering a minimum position a ‘flat’ rate with any reductions requiring approval by senior management.

For risks where supporting markets follow at lower than the lead price, insurers are seeking to renew at a premium closer to the lead, resulting in the potential for a small increase in the overall composite premium.

Appetite for offering long-term deals is reducing. Unless the exposure justifies a risk-adjusted reduction in premium, many buyers will find it difficult to achieve pricing reductions.

Risks are subject to greater underwriting scrutiny as insurers look to improve underwriting discipline on existing business.

Capacity remains plentiful for risks buying limits up to USD 500m where reductions continue to be available.

Airports/ANSPs:

Flat

Manufacturers/ MRO:

Flat to +5% Ground handlers/ Refuellers:

Flat to +5%

Price prediction

General Aviation

Driven by an underwriting loss ratio in excess of 100% for the last three years, the General Aviation sector is currently undergoing major structural changes with a number of markets withdrawing from the class or reviewing their participation.

The Corporate Jet sector is challenging with attritional loss frequency leaving this an area with a limited scope of willing participants.

Rotor Wing risks have been particularly impacted by a large number of total losses, especially in more hazardous areas, including the off-shore and Latin American military sectors. Notwithstanding growth in fleet value and despite a clean loss record, an ‘as before’ renewal is now deemed competitive.

Loss-affected accounts or risks where insurers perceive there to be below technical rating adequacy are experiencing rate increases. For Corporate Jets, this can equate to between 10% and 15%, with Rotor Wing risks seeing increases of between 25% and 40%.

Market conditions are stimulating innovation in placing structure, with excess liabilities, retention structures and swing protections becoming a common consideration.

Corporate Jets

Flat to +15% Fixed Wing

Flat to +20%Rotor Wing

Flat to +40%

Price prediction


Financial Institutions / Leasing Companies

Insurance for aircraft leasing companies, banks and trading groups remains a competitive sector of the Aviation market. Capacity is abundant with insurers prepared to compete for market share due to the long-term profitability of this class.

The impact of reduced capacity and a tougher pricing environment in the wider Aviation market may result in a more stable pricing trend in this area going forward, but this sector remains a buyer’s market.

Specific market losses have affected the rating direction but this is limited to ancillary Hull War coverage which is experiencing significant rate increases.

Price prediction

Flat to -5%

Space

The Space insurance market continues to be highly competitive and attractive to the insurance buyer.

2017 catastrophes and a number of claims and anomalies within the Space sector in the first half of 2018 have failed to stem the tide of further rate reductions.

Significant overcapacity continues with an anticipation of more capacity emerging later during the second half of 2018.

Oversupply of insurance continues to be a primary driver in pushing premium rates for both Launch and In Orbit risks to their current all-time lows.

Price prediction

Flat to -10%

Contact

Patrick Richardson Aviation T: +44 203 124 6287 E: patrick.richardson @willistowerswatson.com


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This market is believed to have experienced around USD 3 billion of claims over the preceeding 12 - 18 months, being the most costly period on record.

2017 catastrophes continue to have an effect on Construction terms and conditions:

Rate increases now as much as 100% on exposed risks with large variations in terms quoted

VARTOL deductibles being applied with minimums between 3% and 5%.

The market remains extremely competitive in India, the Middle East and Asia.

Recent UK losses may challenge abundant levels of capacity and record-low pricing.

Deviation of quote range is increasing as each insurer is tasked to improve profitability, increasing the negotiating timescales.

Power/Process Engineering/Complex EAR

Rate reductions are tapering off as some markets start to push for increases.

Catastrophe-exposed risks are experiencing large rate variation during the quotation process.

Technological change in the Power, Process Engineering and Complex EAR sector advances at pace and capacity remains readily available.

Buyers are being encouraged to continue to look at warranties and insurability.

Civil Engineering Risks

Rate reductions are tapering off and increased quote discrepancies are being reported.

Catastrophe-exposed risks are experiencing large rate variation during the quotation process.

Heavy-Civils Risks including Dams and Tunnelling are receiving more underwriting scrutiny given recent loss experience.

Less appetite for projects with periods over eight or nine years.

Construction

U.K. Projects and Annuals

Record levels of capacity remain for all types of risks

Some quote discrepancies noted but market remains extremely competitive

Two recent high profile losses in Glasgow and London may be felt across both the Construction and Casualty markets

The one thing

Market uncertainty over losses and underlying profitability requires greater lead time to secure the best terms and conditions.

Price prediction

Non-cat:

FlatCat-exposed:

+5% to +50%

Contact

Michael Venables Construction T: +44 203 124 7925 E: michael.venables @willistowerswatson.com


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The retail environment remains challenging with another major household name appointing administrators in August and many more forecasting reduced profits, losses and, in some cases, restructuring.

The number of Trade Credit insurance claims in the UK has increased by up to 50% in the first quarter of 2018.

Major insolvencies in the Retail and Construction sectors are likely to lead to more stringent underwriting criteria and a reduction in capacity going forward.

Insurers are still investing in new credit teams leading to rate competition in direct traditional ‘whole-turnover’ credit insurance markets despite efforts to maintain and increase rates.

Trade Credit insurance premium rates are anticipated to remain flat or rise modestly through 2018, although should insolvencies continue to rise beyond the spike observed in the fourth quarter of 2017 and beginning of 2018, this could put pressure on pricing for the first time in two decades.

Trade Credit

Price prediction

The one thing

The challenging retail sector is leading insurers to reduce capacity and apply more disciplined and tighter underwriting criteria.

Flat to +5%

Contact

Richard Talboys Financial Solutions – Trade Credit T: +44 203 124 1677 E: richard.talboys @willistowerswatson.com


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This sector continues to see new market entrants.

Increased capacity and longer tenors are helping support the competitive Political Risk landscape.

A decade on from the Global Financial Crisis, the geopolitical landscape looks increasingly volatile, and inherently difficult to predict.

Volatility is not limited to the emerging or ‘frontier’ markets.

Claims activity is on the rise with Sovereign issues in Africa a key theme for 2018, both in terms of non-payment and currency issues.

While premium rates have remained relatively flat for this class, this could change if the political landscape continues to deteriorate and markets experience a corresponding increase in loss activity.

Political Risk and Trade Credit

Price prediction

The one thing

The repercussions on world trade brought about by increased trade tensions between the US and China could have profound consequences on the Political Risk and Trade Credit market.

Flat

Contact

Victoria Padfield Financial Solutions — Political and Trade Credit Risk T: +44 203 558 9209 E: victoria.padfield @willistowerswatson.com


mailto:victoria.padfield%0A%40willistowerswatson.com?subject=mailto:victoria.padfield%0A%40willistowerswatson.com?subject=

We are seeing continued rate reductions, although not at the double-digit reductions of previous years.

In some countries or regions where the security situation is considered to be deteriorating, rates are increasing in line with heightened risk.

Rates in some heavily aggregated areas of the world have reached minimum levels and while new capacity may provide liquidity, demand for ‘key-zone’ areas often means capacity is not available for long.

Two insurers with large line sizes are seeking to reduce their capacity and appetite, but the majority of insurers are maintaining or even increasing their capacity and appetite.

There has been a notable increase in the market capacity for nuclear, chemical, biological and radiological terrorism risks.

Alongside increase in loss frequency from lone-wolf style attacks, many insurers are designing solutions to address the changing face of terrorism.

Products such as Active Assailant, Active Shooter or Malicious Attack have been available for several years, but increased interest in this area is stimulating solution creativity.

Terrorism and Political Violence

Flat to -5% Case-by-case increases in regions suffering perceived increase in risk due to a deterioration in security

Price prediction

The one thing

As pricing and capacity are starting to see a new normal, insurers are increasingly trying to differentiate and innovate, bringing new benefits and challenges to insurance buyers.

Contact

James Borrie Financial Solutions – Terrorism T: +44 203 124 6518 E: [email protected]


mailto:james.borrie%40willistowerswatson.com?subject=

Insurers are increasingly looking to increase rates across their Motor portfolio following changes to Ogden in 2017.

Rate increases of between 5% and 10% are being requested from incumbent insurers on well-performing risks compared to flat rates 12 months ago.

The Civil Liability Bill which includes the review of the Ogden rate and whiplash reforms has a preferred implementation date of April 2019, but this date is not definite and the final detail of any rate change is still to be determined.

A number of new Managing General Agents (MGAs) have recently been launched.

Reduced appetite on segments such as Self Drive Hire in part due to terrorism.

The UK’s Motor Insurers’ Bureau (MIB) is exploring reinsurance options after members voted for the pool to take responsibility for the compensation of victims involved in terrorist attacks using vehicles as the weapon. This decision reverses the change made in March 2017 that put unlimited liability for compensation for such attacks onto the individual providers of the Motor cover.

Markets prefer multi-line deals that encompass Property Damage and Casualty coverage with some insurers declining to quote stand-alone Motor business.

Motor

Price prediction

The one thing

The quality of risk and underwriting information is essential to mitigate insurers’ desire to increase rates, with the use of technology and focus around driver behaviour and training becoming increasing differentiators.

Insurers are calling for between +5% and +10% increases, with rate rises of +10% to +20% on large programmes, slightly lower than was predicted by insurers at the end of 2017

Contact

Barry Stonebridge Motor Property & Casualty CoE T: +44 203 124 8740 E: [email protected]


mailto:barry.stonebridge%40willistowerswatson.com?subject=mailto:barry.stonebridge%40willistowerswatson.com?subject=

Price prediction

The one thing

Expectation for significant contraction in capacity and coverage along with increased retention levels, particularly for Contractors with historical exposure to ‘cladding’.

+5% to +15%

Financial and Executive Risks

Professional Indemnity

Continued deterioration in claims, particularly in the Construction, Legal and Financial Services sectors

In 2017, International Professional Indemnity was the second-worst performing class written at Lloyd’s bringing close scrutiny and possible Corporation action on those Syndicates unable to address poor profitability

Decisions by several Lloyd’s Syndicates to close all or most of their Professional Indemnity books in 2017 has continued in 2018

Mergers & Acquisitions

Despite some new market entrants, previous declines in rates have generally stabilised

Movement in underwriting teams, supported by new market entrants, provides some options to insurance buyers

‘Stapled’ Warranty & Indemnity policies becoming more frequent, with sellers driving the process and retaining control for longer, especially where there is vendor due diligence

Coverage has continued to broaden with interest in enhanced policy terms, particularly from US Private Equity buyers, akin to US market standards

Experiencing an increase in loss notifications


Price prediction

The one thing

There is an increasing trend by insurers to price in additional coverage. Clients need to consider the benefit and need for such coverage against the cost of risk in this changing rating environment.

Contact

Mark Wakefield Financial & Executive Risks T: +44 203 124 6627 E: [email protected]

D&O

Overall global ‘technical’ capacity remains high at over USD 1 billion, however a significant reduction in insurer appetite with reductions in ‘per risk’ capacity of between 25% to 50%

UK: capacity reductions of between 0% to 25%

US securities exposure: capacity reductions of between 33% to 50%

Australia: extremely challenging

Latin America: capacity reductions of between 20% to 40%

The London Market exposed to global claims trends and responding on a differentiated basis to other geographies and listing exposures

Broad coverage remains available although insurers increasingly unwilling to grant new enhancements or are imposing more restrictive terms

Insurers more likely to offer terms on their own Policy Form with growing reluctance to use other insurer or broker Forms

Pressure on sub-limits and bolt-on coverages;

Following recent corporate insolvencies, insurers seeking to restrict coverage in this area

Increased contractual subjectivities and inflexibility around timeframes for complying with these conditions

Increasingly-regulated global environment creating greater exposures and potential for regulatory and follow-on civil claims

UK claims environment significantly increasing in terms of frequency and severity driven by Insolvencies, Financial Accounting issues and Regulatory investigations

2017 worst year since 2001 for US Securities Class Actions

Australian market decimated by Side C Entity claims

Combined Ratios of insurers frequently above 100%, with negative development of prior year reserves

Rest of World Side B & C Retention, experiencing significant upwards pressure

USA Side C Retentions increasing to between USD 500,000 and USD 1 million and higher depending on market capitalisation and listing status

US Listed companies: +30% to 150% and upwards (risks considered historically underpriced) +5% to +30% (non-US Traded / Loss free) +50% to +100% (Loss affected)


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Product Recall

In general, the Product Recall insurance market continues to harden

Quantity and severity of Product Recall activity around the world continues to rise

Various incidents experienced ranging from the recall of millions of Electronic Cigarettes in the US (lithium batteries) to a major cereal manufacturer pulling product from shelves due to salmonella mbandaka that infected people across 31 states in the US.

Increasingly-restrictive underwriting appetite and lower average capacity deployed, requiring a larger number of participating insurers to complete insurance placements

London insurers have been pushing for rate increases of up to 10% in the standalone product recall market although competition from overseas hubs is stifling the ability to push through the level of rate increase sought at the beginning of the year

Product Recall negotiations taking more time to achieve competitive outcomes than previous years

More willingness by insurers to provide improved coverage in areas that have traditionally been restricted or sub-limited such as ‘customer loss of profits’ for the very best clients and risks

Price prediction

The one thing

Themes such as supply chain complexity, greater consumer / customer awareness, better detection technology and more sophisticated products, continue to raise the profile of the Product Recall market and the importance of this specialised insurance coverage.

+ 2.5% to +5%

Contact

George Beattie Product Recall, Property & Casualty CoE T: +44 203 124 7523 E: [email protected]


mailto:george.beattie%40willistowerswatson.com?subject=mailto:george.beattie%40willistowerswatson.com?subject=

Q1 2018 Results - Consolidated data (Millions)

Insurer

Notes Ccy

Shareholders’ Equity Net Written Premium Net Income Combined Ratio

30 Jun 2018 31 Dec 2017 ∆ H1 2018 H1 2018 H1 2017 31 Dec 2017 ∆ H1 / H1 H1 2018 H1 2017 31 Dec 2017 ∆ H1 / H1

% Sh Equity*

H1 18 H1 17 H1 2018 H1 2017 31 Dec 2017 ∆ HY/HY

AIG (2) USD 61,186 65,171 -6.1% 14,482 15,396 31,374 -5.9% 1,875 2,315 -6,084 -19.0% 5.9% 6.2% 102.5% 98.7% 117.3% +3.8%

Allianz EUR 60,282 65,553 -8.0% 39,110 38,782 72,433 0.8% 4,025 4,013 6,803 0.3% 12.8% 12.1% 94.4% 94.6% 95.2% -0.2%

Arch Capital USD 9,164 9,197 -0.4% 2,711 2,525 4,961 7.4% 394 438 619 -10.1% 8.6% 10.2% 82.0% 83.1% 91.4% -1.1%

Aspen USD 2,825 2,926 -3.4% 1,122 1,265 2,213 -11.3% 16 172 -266 -90.6% 1.1% 9.5% 97.7% 98.5% 124.3% -0.8%

Axis Capital USD 5,253 5,341 -1.7% 2,986 2,465 4,027 21.2% 177 116 -369 52.9% 6.7% 3.8% 92.0% 99.8% 113.1% -7.8%

Beazley USD 1,473 1,499 -1.8% 1,105 936 1,788 18.0% 48 132 130 -63.9% 6.4% 17.6% 95.0% 90.0% 99.0% +5.0%

Berkshire H'way (4) USD 358,094 348,296 2.8% 27,522 34,120 62,242 -19.3% 10,873 8,322 44,940 30.7% 6.2% 5.7% 91.7% 97.9% 101.1% -6.2%

Chubb USD 50,971 51,172 -0.4% 15,890 14,917 29,244 6.5% 2,376 2,398 3,861 -0.9% 9.3% 9.7% 89.2% 87.8% 94.7% +1.4%

Everest Re USD 8,241 8,369 -1.5% 3,419 2,753 6,245 24.2% 280 537 469 -47.8% 6.7% 12.9% 99.4% 88.3% 103.5% +11.1%

Fairfax USD 13,805 13,811 -0.0% 6,416 4,489 9,984 42.9% 747 394 1,741 89.6% 10.8% 8.0% 94.9% 94.7% 106.6% +0.2%

Generali EUR 23,625 25,079 -5.8% 33,377 31,637 64,690 5.5% 1,329 1,221 2,110 8.8% 10.7% 10.1% 92.0% 92.8% 92.8% -0.8%

Hannover Re (1,3) EUR 8,322 8,528 -2.4% 9,121 8,123 16,094 12.3% 555 535 959 3.8% 13.2% 11.9% 95.7% 96.5% 99.8% -0.8%

Hiscox USD 2,419 2,367 2.2% 1,399 1,275 2,403 9.7% 153 123 34 24.3% 12.8% 10.6% 87.9% 90.8% 99.9% -2.9%

Lancashire USD 1,153 1,107 4.1% 234 240 398 -2.4% 76 69 -71 10.7% 13.5% 11.1% 67.1% 78.4% 124.9% -11.3%

Liberty Mutual USD 20,852 20,661 0.9% 19,505 18,074 36,789 7.9% 1,629 477 17 241.5% 15.8% 4.6% 98.5% 102.4% 105.6% -3.9%

Mapfre EUR 8,457 8,611 -1.8% 10,142 10,504 19,416 -3.4% 386 415 701 -7.1% 9.1% 9.4% 97.4% 97.2% 98.1% +0.2%

Markel USD 9,481 9,504 -0.2% 2,515 2,398 4,418 4.9% 214 220 395 -2.6% 4.5% 5.1% 91.0% 95.0% 105.0% -4.0%

Munich Re (1,3) EUR 26,711 28,012 -4.6% 10,632 23,923 47,550 -55.6% 1,549 1,283 375 20.7% 11.4% 8.2% 95.5% 95.5% 114.1% -

Navigators USD 1,234 1,226 0.7% 773 670 1,271 15.2% 63 42 40 51.4% 10.3% 6.9% 95.0% 96.9% 103.2% -1.9%

PartnerRe (1) USD 6,660 6,745 -1.3% 3,143 2,650 5,120 18.6% 28 253 264 -88.8% 0.8% 7.5% 94.3% 91.7% 99.3% +2.6%

SCOR EUR 6,017 6,195 -2.9% 6,868 6,893 13,464 -0.4% 262 292 286 -10.3% 8.6% 8.8% 91.4% 93.5% 103.7% -2.1%

Swiss Re (1,3) USD 30,801 34,124 -9.7% 18,334 16,817 32,316 9.0% 1,006 1,211 331 -16.9% 6.2% 6.8% 92.9% 97.4% 111.5% -4.5%

Travelers USD 22,623 23,731 -4.7% 13,955 13,135 26,219 6.2% 1,193 1,212 2,056 -1.6% 10.3% 10.3% 96.8% 96.4% 97.9% +0.4%

Validus USD 3,809 3,895 -2.2% 2,196 1,727 2,481 27.1% -57 196 -48 -129.1% -2.9% 9.8% 95.6% 82.9% 122.6% +12.7%

WR Berkley USD 5,426 5,411 0.3% 3,289 3,211 6,261 2.4% 346 232 549 49.1% 12.8% 9.0% 94.8% 95.4% 96.7% -0.6%

XL Capital USD 9,660 9,848 -1.9% 5,977 5,632 10,681 6.1% 472 454 -560 3.8% 9.7% 8.3% 95.5% 93.3% 108.3% +2.2%

Zurich USD 29,729 33,063 -10.1% 21,471 21,071 38,708 1.9% 1,791 1,503 3,004 19.2% 11.4% 9.9% 97.5% 99.5% 98.2% -2.0%

*Annualised Net Income as % of Average Shareholders’ Equity.

(1) NWP includes both Life and Non-Life business.

(2) Figures for net premiums are Net Earned Premium, not Net Written Premiums.

(3) Hannover Re, Munich Re, Swiss Re: Combined Ratios are in respect of the P&C Reinsurance division only.

(4) Berkshire Hathaway H1 premiums are Net Earned Premium, not Net Written Premiums (H1 2017 includes USD10,186mn of

assumed Retroactive Reinsurance)

The information compiled in this report by Willis Towers Watson is compiled from third party sources we consider to be reliable;

However we do not guarantee and are not responsible for its accuracy or completeness and no warranty or representation of accuracy

or completeness is given.

Willis Towers Watson – Market Security Group


Q1 2018 Results - Consolidated data (Millions)

Insurer

Notes Ccy

Shareholders’ Equity Net Written Premium Net Income Combined Ratio

30 Jun 2018 31 Dec 2017 ∆ H1 2018 H1 2018 H1 2017 31 Dec 2017 ∆ H1 / H1 H1 2018 H1 2017 31 Dec 2017 ∆ H1 / H1

% Sh Equity*

H1 18 H1 17 H1 2018 H1 2017 31 Dec 2017 ∆ HY/HY

AIG (2) USD 61,186 65,171 -6.1% 14,482 15,396 31,374 -5.9% 1,875 2,315 -6,084 -19.0% 5.9% 6.2% 102.5% 98.7% 117.3% +3.8%

Allianz EUR 60,282 65,553 -8.0% 39,110 38,782 72,433 0.8% 4,025 4,013 6,803 0.3% 12.8% 12.1% 94.4% 94.6% 95.2% -0.2%

Arch Capital USD 9,164 9,197 -0.4% 2,711 2,525 4,961 7.4% 394 438 619 -10.1% 8.6% 10.2% 82.0% 83.1% 91.4% -1.1%

Aspen USD 2,825 2,926 -3.4% 1,122 1,265 2,213 -11.3% 16 172 -266 -90.6% 1.1% 9.5% 97.7% 98.5% 124.3% -0.8%

Axis Capital USD 5,253 5,341 -1.7% 2,986 2,465 4,027 21.2% 177 116 -369 52.9% 6.7% 3.8% 92.0% 99.8% 113.1% -7.8%

Beazley USD 1,473 1,499 -1.8% 1,105 936 1,788 18.0% 48 132 130 -63.9% 6.4% 17.6% 95.0% 90.0% 99.0% +5.0%

Berkshire H'way (4) USD 358,094 348,296 2.8% 27,522 34,120 62,242 -19.3% 10,873 8,322 44,940 30.7% 6.2% 5.7% 91.7% 97.9% 101.1% -6.2%

Chubb USD 50,971 51,172 -0.4% 15,890 14,917 29,244 6.5% 2,376 2,398 3,861 -0.9% 9.3% 9.7% 89.2% 87.8% 94.7% +1.4%

Everest Re USD 8,241 8,369 -1.5% 3,419 2,753 6,245 24.2% 280 537 469 -47.8% 6.7% 12.9% 99.4% 88.3% 103.5% +11.1%

Fairfax USD 13,805 13,811 -0.0% 6,416 4,489 9,984 42.9% 747 394 1,741 89.6% 10.8% 8.0% 94.9% 94.7% 106.6% +0.2%

Generali EUR 23,625 25,079 -5.8% 33,377 31,637 64,690 5.5% 1,329 1,221 2,110 8.8% 10.7% 10.1% 92.0% 92.8% 92.8% -0.8%

Hannover Re (1,3) EUR 8,322 8,528 -2.4% 9,121 8,123 16,094 12.3% 555 535 959 3.8% 13.2% 11.9% 95.7% 96.5% 99.8% -0.8%

Hiscox USD 2,419 2,367 2.2% 1,399 1,275 2,403 9.7% 153 123 34 24.3% 12.8% 10.6% 87.9% 90.8% 99.9% -2.9%

Lancashire USD 1,153 1,107 4.1% 234 240 398 -2.4% 76 69 -71 10.7% 13.5% 11.1% 67.1% 78.4% 124.9% -11.3%

Liberty Mutual USD 20,852 20,661 0.9% 19,505 18,074 36,789 7.9% 1,629 477 17 241.5% 15.8% 4.6% 98.5% 102.4% 105.6% -3.9%

Mapfre EUR 8,457 8,611 -1.8% 10,142 10,504 19,416 -3.4% 386 415 701 -7.1% 9.1% 9.4% 97.4% 97.2% 98.1% +0.2%

Markel USD 9,481 9,504 -0.2% 2,515 2,398 4,418 4.9% 214 220 395 -2.6% 4.5% 5.1% 91.0% 95.0% 105.0% -4.0%

Munich Re (1,3) EUR 26,711 28,012 -4.6% 10,632 23,923 47,550 -55.6% 1,549 1,283 375 20.7% 11.4% 8.2% 95.5% 95.5% 114.1% -

Navigators USD 1,234 1,226 0.7% 773 670 1,271 15.2% 63 42 40 51.4% 10.3% 6.9% 95.0% 96.9% 103.2% -1.9%

PartnerRe (1) USD 6,660 6,745 -1.3% 3,143 2,650 5,120 18.6% 28 253 264 -88.8% 0.8% 7.5% 94.3% 91.7% 99.3% +2.6%

SCOR EUR 6,017 6,195 -2.9% 6,868 6,893 13,464 -0.4% 262 292 286 -10.3% 8.6% 8.8% 91.4% 93.5% 103.7% -2.1%

Swiss Re (1,3) USD 30,801 34,124 -9.7% 18,334 16,817 32,316 9.0% 1,006 1,211 331 -16.9% 6.2% 6.8% 92.9% 97.4% 111.5% -4.5%

Travelers USD 22,623 23,731 -4.7% 13,955 13,135 26,219 6.2% 1,193 1,212 2,056 -1.6% 10.3% 10.3% 96.8% 96.4% 97.9% +0.4%

Validus USD 3,809 3,895 -2.2% 2,196 1,727 2,481 27.1% -57 196 -48 -129.1% -2.9% 9.8% 95.6% 82.9% 122.6% +12.7%

WR Berkley USD 5,426 5,411 0.3% 3,289 3,211 6,261 2.4% 346 232 549 49.1% 12.8% 9.0% 94.8% 95.4% 96.7% -0.6%

XL Capital USD 9,660 9,848 -1.9% 5,977 5,632 10,681 6.1% 472 454 -560 3.8% 9.7% 8.3% 95.5% 93.3% 108.3% +2.2%

Zurich USD 29,729 33,063 -10.1% 21,471 21,071 38,708 1.9% 1,791 1,503 3,004 19.2% 11.4% 9.9% 97.5% 99.5% 98.2% -2.0%


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About Willis Towers WatsonWillis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimise benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.

Willis Limited, Registered number: 181116 England and Wales.Registered address: 51 Lime Street, London, EC3M 7DQ. A Lloyd’s Broker. Authorised and regulated by the Financial Conduct Authority for its general insurance mediation activities only. Copyright © 2018 Willis Towers Watson. All rights reserved.WTW77443/08/2018

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Willis Limited/Willis Re Inc. All rights reserved. Some information contained in this document may be compiled from third party sources and we do not guarantee and are not responsible for the accuracy of such. This document is for general information only and is not intended to be relied upon. Any action based on or in connection with anything contained herein should be taken only after obtaining specific advice from independent professional advisors of your choice. The views expressed in this document are not necessarily those of Willis Limited / Willis Re Inc., its parent companies, sister companies, subsidiaries or affiliates, Willis Towers Watson PLC and all member companies thereof (hereinafter “Willis Towers Watson”). Willis Towers Watson is not responsible for the accuracy or completeness of the contents herein and expressly disclaims any responsibility or liability for the reader’s application of any of the contents herein to any analysis or other matter, or for any results or conclusions based upon, arising from or in connection with the contents herein, nor do the contents herein guarantee, and should not be construed to guarantee, any particular result or outcome. Willis Towers Watson accepts no responsibility for the content or quality of any third party websites to which we refer.

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