5 May 2021Insurance

Rates continue to rise but show signs of moderating: Marsh

Global commercial insurance prices increased 18 percent in the first quarter of 2021, according to Marsh’s Global Insurance Market Index, with the index seeing the first declines in the average rate of price increases since the first global rate rises were registered in Q4 2017.

It follows year-on-year average increases of 20 percent and 22 percent in Q3 and Q4 2020, respectively, for the index.

Increases across geographies moderated due to generally slower rate rises in property insurance and financial and professional lines, Marsh said. Financial and professional lines saw the highest rate of increase across the major insurance product categories, at 40 percent, compared to 45 percent the previous quarter.

Global property insurance pricing was up 15 percent on average, down from the 20 percent increase in Q4 2020, while casualty pricing was up 6 percent on average, down from 7 percent the previous quarter.

The UK saw a composite pricing increase of 35 percent, compared to 44 percent in Q4 2020, while the Pacific region saw a 29 percent increase, down from 35 percent the previous quarter, driving the global composite rate.

The rate of increase in the US was 14 percent, down from 17 percent, while the Pacific region was 29 percent, down from 35 percent. Asia saw increases of 8 percent, down from 11 percent, while rates rose 5 percent in Latin America and the Caribbean, down from 9 percent.

Cyber insurance pricing bucked the broader trend, with prices increasing by 35 percent in the US and 29 percent in the UK in Q1 2021, driven by a rise in the frequency and severity of losses. In Q4 2020 cyber rates rose 17 percent in the US and 26 percent in the UK.

Lucy Clarke, president at Marsh Specialty and Marsh Global Placement, said: “Although we will continue to see price increases in some lines and the market overall will remain challenging for our clients, we expect price increases to continue to moderate throughout the rest of the year.”

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