Expect global commercial insurance rates to moderate in most lines: Marsh
Global commercial insurance rates were up 15 percent in the third quarter of 2021, making it the 16th consecutive quarter of price increases, according to the Global Insurance Market Index released by broker Marsh.
The index shows that the same rate of increase was recorded in the previous quarter, which means that the rate of increase is likely moderating in many lines of business and in most geographies. Marsh stated that this trend may suggest that pricing increases peaked in the fourth quarter of 2020 at 22 percent.
Increases across most regions moderated due to a slower rate of increase in property insurance and directors’ and officers’ liability (D&O), the broker said. The UK saw a composite pricing increase of 27 percent (down from 28 percent in Q2 2021), while the Pacific region saw a 17 percent increase (down from 23 percent in Q2 2021). 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.
Overall, the global property insurance pricing was up 9 percent on average, down from a 12 percent increase in the first quarter of 2021, while 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.
Marsh noted that 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.
Lucy Clarke (pictured), president of Marsh Specialty and Marsh Global Placement, said: “While the risk and insurance landscape remains challenging around the world, we expect rates to continue to moderate in most lines. However, the pressure on rates in cyber insurance is likely to continue. Developing solutions for our clients in this segment remains a top priority for Marsh.”
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