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Commercial insurance increases declining: Aon



Tough market conditions remain in the commercial insurance sector but appear to be dampening on some fronts as interest rate hikes slow across certain lines and capacity enters the market, according to a report released on Tuesday by Aon PLC.

Drawing discipline also continues including increasing deductibles, sublimits and exclusions of policy language, the report said.

“Pricing remains to varying degrees; however, the increases are decreasing, says Aon. "The capacity is dense but sufficient for all but the largest and most complex investments, especially D&O."

The exceptions and mandate explanations occur in silent cyber, infectious disease and conditional business interruptions, Aon said.

Insurance companies meanwhile, apply sublimits to limit their total exposure, and deductibles trends upward to shift some of the risk and help offset price increases.

Although interest rate hikes are declining overall, some lines are still challenging, such as board members and officers' responsibilities, cyber, disaster-driven real estate investments and those with conditional business interruptions, says Aon.

Those who want to secure a large border capacity will be "much more challenged" than placements with lower borders, according to the report.

Despite the continuing challenges and continuing tough market conditions, insurance companies have begun to look for areas to grow, Aon said.

"The market is less stressed" said the broker. "Insurance companies continue to move from portfolio restructuring to growth, with an emphasis on profitable growth."

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