Global commercial insurance prices increased 15% in the third quarter of 2021, according to the Global Insurance Market Index released today by Marsh, the world’s leading insurance broker and risk advisor, 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%.
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% (down from 28% in Q2 2021) and the Pacific region, with a 17% increase (down from 23% in Q2 2021) continued to drive the global composite rate. The rate of increase in Asia was 6% (steady from the previous quarter), 2% in LAC (down from 4%), and 10% in Continental Europe (down from 13%). The one exception was the US where rates increased by 14% (up from 12% 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% on average, down from a 12% increase in the first quarter 2021; casualty pricing was up 6% 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%, compared to 34% in the previous quarter.
· Cyber insurance pricing continued to diverge from the moderation trend. In the US prices increased 96% in the US (up from 56% in Q2), and 73% in the UK (up from 35% in Q2), driven by the frequency and severity of ransomware claims.
Commenting on the report, Lucy Clarke, President, 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.”