Expect commercial insurance rates to moderate globally through 2022, says Marsh
Global commercial insurance rates were up 13% in the fourth quarter of 2021, making it the 17th consecutive quarter of price increases, according to the Global Insurance Market Index released by broker Marsh.
The index indicates that rate increases are continuing to moderate in many lines of business and in most geographies - a trend that began in the first quarter of 2021.
Marsh stated that price increases across most regions moderated due to a slower rate of increase in property insurance and directors and officers liability (D&O).
The UK saw a composite pricing increase of 22% (down from 27% in Q3), while the US witnessed a steady increase of 14% from the previous quarter. The rate of increase in the Pacific region was 13% (down from 17% in Q3), in Asia it was 4% (down from 6%), and 9% in Continental Europe (down from 10%). The broker noted that one exception to the moderating trend was Latin America and the Caribbean where rates increased by 4% (up from 2% the previous quarter).
Overall, the global property insurance pricing was up 8% on average, down from a 9% increase in the third quarter of 2021; casualty pricing was up 5% on average, down from 6% in the previous two quarters.
Pricing in financial and professional lines, driven by cyber, again had the highest rate of increase across the major insurance product categories, at 31%, compared to 32% in the previous quarter.
Marsh highlighted that cyber insurance rates continued to rise driven largely by the continued increase in the frequency and severity of ransomware claims with many insurers seeking to tighten coverage terms and conditions. Prices increased 130% in the US (up from 96% in Q3), and 92% in the UK (up from 73%).
Commenting on the report, Lucy Clarke (pictured), president, Marsh Specialty and Marsh Global Placement, said: “We are operating in a challenging risk and insurance market and will continue to focus on developing solutions in classes such as cyber, which will continue to be difficult for both clients and insurers. More broadly, however, we expect continued moderation in rate increases through 2022, a trend which will be welcomed by our clients.”
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