Global commercial insurance pricing continues to rise, but rate of increase is slowing
- Published: Wednesday, 27 October 2021 09:02
Global commercial insurance prices increased 15 percent in the third quarter of 2021, according to the Global Insurance Market Index released by Marsh, the same rate of increase recorded in the previous quarter.
While this is the 16th consecutive quarter of increases, the rate of increase continues to moderate in many lines of business and in most geographies. This trend may suggest that pricing increases peaked in the fourth quarter of 2020, at 22 percent.
Pricing increases across most regions moderated due to a slower rate of increase in property insurance and directors’ and officers’ liability (D&O). The UK, with a composite pricing increase of 27 percent (down from 28 percent in Q2 2021) and the Pacific region, with a 17 percent increase (down from 23 percent in Q2 2021) continued to drive the global composite rate. The rate of increase in Asia was 6 percent (steady from the previous quarter), 2 percent in LAC (down from 4 percent), and 10 percent in Continental Europe (down from 13 percent). The one exception was the US where rates increased by 14 percent (up from 12 percent the previous quarter), driven by substantial increases in cyber insurance rates and a moderate increase in property and casualty rates.
Among other findings, the survey noted:
- Global property insurance pricing was up 9 percent on average, down from a 12 percent increase in the first quarter 2021; casualty pricing was up 6 percent on average, which was the same as the previous two quarters.
- Pricing in financial and professional lines again had the highest rate of increase across the major insurance product categories, at 32 percent, compared to 34 percent in the previous quarter.
- Cyber insurance pricing continued to diverge from the moderation trend. In the US prices increased 96 percent in the US (up from 56 percent in Q2), and 73 percent in the UK (up from 35 percent in Q2), driven by the frequency and severity of ransomware claims.