Commercial rate growth slows again, now at 1% globally Q1: Marsh
Commercial insurance renewal rate growth slowed globally yet again in Q1, down to a 1% annual rate, buoyed by the US and Europe as the UK, Canada and APAC slid into rate decline, according to the latest reading of the Marsh Global Insurance Market Index.
Broad brush views to property and casualty continue to show growth, most often slipping, but financial and professional lines as well as cyber were down at mid-single digit rates.
The 1% headline reading is the twenty-sixth consecutive quarter of pricing gain, but the thirteenth quarter since index growth peaked at 22% in Q4 2020.
The pace of renewal rate growth was flat or down across all seven geographic regions measured, including a 1 point decline to 3% in Europe, 2 point slides to negative 2% in the UK Canada, Asia and the Pacific and a flat reading of 3% growth for the US.
Property insurance renewal rates increased 3% globally, down from 6% in the Q4 reading and a double digit reading just three quarters ago.
The highest growth for property came in the US, down 3 points to 8% with Marsh claiming insurer appetite had risen and insureds could add limit in higher layers amid the increased competition, even for some cat-exposed accounts.
Elsewhere, UK property renewal rate growth rose a notch to a still-mild 2% with some new capacity said to be visible. Renewal rate growth in Europe slipped to 5% but with scrutiny around nat cat. Asia, Inda, the middle east and Africa were all down.
Casualty renewal rate growth on a global scale is fixed mid-term at the 3% mark with Marsh claiming that insurers globally remain concerned with US claims threats.
US casualty renewal rate growth edged up to 4%, its highest level in nearly two years. The growth rate excluding declines for workers comp would have been 7%. Auto liability remains “challenging” amid large jury awards and rising repair costs. Excess liability rates increased 9%, up from a prior 7% reading.
Elsewhere, UK casualty renewal rate growth was flat at a milder 2%. European casualty renewal rate growth edged down to 5%, the anchor-point of its long-term range. Asian market softening eased to a 1% negative pace.
Financial and professional lines rates decreased 7%, compared to 6% in the prior quarter with all seven global regions suffering a decrease.
US renewal rates in the line suffered their seventh consecutive quarter of annual decrease, at 5% in Q1. The focus remains public company D&O liability with rate decline of 8% matching the Q4 reading. Errors and omissions (E&O) rates decreased “slightly” while rates for financial institutions were said to have increased slightly.
Elsewhere, financial and professional rates decreased 9% in the UK, led by 10-15% declines for D&O and high single-digit declines for financial institutions. Mark rate decline at 7% in Europe and 6% in Asia.
Cyber rates continued to decline, falling 6% globally and with decreases in every region.
US cyber insurance rates decreased 6% in the quarter despite a claims frequency uptick. “Excess rate reductions continued to drive down total programme pricing due to the availability of excess capacity,” authors said.
Elsewhere, cyber renewal rates decreased 7% in Europe with authors noting the downward movement in rates primarily in excess layers, but with some larger companies finding savings in primary and lower layers. Asian cyber renewal rates were down 3%.
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