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Overcoming Uncertainties in Property Insurance

From rising premiums to shifting underwriting standards, it's clear that the industry is facing a number of challenges and uncertainties. In this article, we will examine the various factors that are contributing to uncertainty in the property insurance industry and explore how professionals can prepare for the next major disruptor. From shifts in underwriting standards and changes in policy wordings to the role of External Councils and the importance of effective communication, we will delve into the complex and ever-evolving landscape of the property insurance market in the CEE region.

In the CEE region, property insurance is typically divided into two main categories: residential property insurance and commercial property insurance. While commercial property insurance covers office buildings, warehouses, and other sorts of business assets, residential property insurance covers houses, apartments, and other residential building types.

The cost of property insurance in the CEE region might vary depending on a number of factors. These include the property's location and age, the kind of coverage desired, and the degree of risk attached to the building. For instance, homes situated in risky locations where there is a larger possibility of crime or natural disasters may have higher insurance costs.

In the CEE region, the non-life insurance market is becoming more and more well-liked, notably the motor category. Contrastingly, the life insurance market plays a lower role as a result of a lack of knowledge and a decline in the unit-linked sector. Due to the expansion of the non-life insurance market (6.4%), the overall gross written premium (GWP) for the CEE area increased by 2.0% from 2017 to 2018, reaching its highest level since 2010. However, compared to 2017, the life segment experienced a 5.5% fall in 2018.

Neil Harrison, the Global Chief Claims Officer at Aon, highlights some of the factors that contribute to this uncertainty, including changes in policy wordings, an increase in coinsurance, and the use of quota shares. Additionally, insurers are becoming more focused on the profitability of their books and may adjust their risk appetite accordingly. These shifts in risk appetite can create uncertainty and change the balance of risk and return in the market. It's important for industry professionals to stay up-to-date on these developments and to be aware of the potential impacts on their business.