Hong Kong underwriting flexibility rises amidst competition: Aon

Despite limited new business opportunities, the market continues to attract capacity.

Hong Kong's insurance market remains well-capitalised with stable demand, but lower-than-expected economic growth is putting pressure on corporate revenues, according to Aon’s Q4 2024 Global Insurance Market Insights Report. 

This is leading to increased scrutiny of budgets, renewal costs, and insurance programs.

Despite limited new business opportunities, the market continues to attract capacity from international insurers.  

According to Dilys Chan, Chief Broking Officer of Commercial Risk Solutions in Hong Kong, the general insurance market remains competitive, with strong capacity across most segments.

Price reductions are evident across all products, including Cyber and Financial Lines, particularly when insurers face competition.

Growth ambitions and strong loss performance are driving insurers to adopt more aggressive pricing strategies for well-performing clients.  

Pricing remains competitive, especially for new business, with large and complex risks seeing double-digit rate reductions at renewal. 

Non-financial line products are experiencing single-digit decreases. Capacity remains abundant, except in loss-impacted areas, as new players enter the Hong Kong market, adding to existing appetite from both international and regional insurers.  

Underwriting has become more flexible amidst increasing competition but remains generally disciplined.  Most placements are renewing with expiring limits, though additional limits are available due to strong capacity. 

Deductibles are largely flat, with some reductions when competition is introduced. Coverage terms are mostly renewing unchanged, though some insurers are willing to offer enhancements.

However, broad exclusions for per- and polyfluoroalkyl substances (PFAS) are becoming more common, and coverage for risks tied to Ukraine, Russia, Eastern Europe, and Myanmar remains restricted.  

Market conditions are generally soft to moderate. Private car risks are experiencing soft conditions, whilst commercial vehicle and motor fleet risks are facing moderate conditions.

The casualty market remains soft and well-capitalised, with insurers competing for both new and renewal business. 

Exclusions for PFAS are widespread but negotiable for large and complex accounts.  

The cyber insurance market continues to soften, with ongoing competition and insurer growth ambitions driving low double-digit rate reductions. 

The Directors & Officers segment is also soft, with strong capacity available even for large and complex accounts, regardless of claims history.  

Property insurance remains competitive, supported by ample capacity, with favourable pricing for well-performing risks. 

However, multinational property programs with natural catastrophe exposures are seeing more moderate conditions.