European insurance buyers should prepare for rising rates and tightening terms and conditions after insurers suffered unprecedented losses over the last two years.
The warning was published in a report from risk consultancy firm Aon, which said that insurance is experiencing a consistent shift towards firming market conditions.
Higher operational costs, evolving buyer demands, reinsurance pressures and record-breaking catastrophe losses are all said to be challenging insurers' business models.
In certain areas of the market, this is expected to result in higher rates, capacity constraints, tightening terms and conditions and a more critical attitude towards risk management.
"As the market becomes more selective, buyers need to be proactive around the renewal process and improve their risk profile," said Aon managing director, Richard Waterer.
"Businesses need to focus on developing stronger risk management programmes and collaboration between the insurance buying function and broader risk management."
The report highlights how natural catastrophe losses reached an unprecedented $247bn (£195bn) in 2017 and 2018 alone.
At the same time, insurers are facing increasing uncertainty around future losses as buyers place greater importance on evolving exposures like reputational and cyber risk.
These evolving buyer demands are said to be more challenging because there is limited historical data and less-mature risk models to draw on.
The impacts are likely to vary from country to country, but the report warns that there are more challenges when buyers are not providing enough underwriting information.
Conversely, if a business has a good loss record, supporting data, proactive risk management programmes and a thought through strategy, these challenges can be overcome.
"Through working with their broker to ensure that insurer relationships are strong and risk data is robust, as well as considering alternative risk financing, such as the use of captives, businesses will be better prepared to navigate the impact of a changing market," Waterer added.