The state of global insurance rates in the 2016 second quarter is very much a mixed bag. On the one hand, global insurance rates declined for the 13th consecutive quarter. However, this is the second quarter in a row that the rate of decline has slowed on average, Marsh said in its latest Global Insurance Market Quarterly Briefing.
For Q2, global insurance rate decreases moderated to 3.6 percent versus 3.8 percent in the previous quarter.
Broken down by sector, the global casualty renewal rate dipped 2.9 percent during the 2016 second quarter; the global property renewal rate declined an average 4.5 percent; and the global FinPro renewal rate declined by 3.1 percent, Marsh said.
As Marsh noted in its report, rate decreases began to moderate for the 2016 first quarter, when global property and global FinPro rates declined 5.6 percent and 2.6 percent, respectively. Global casualty renewal rate declines actually worsened in Q2 compared to the previous quarter, in which they registered a 2.4 percent decline.
Other highlights as cited by Marsh:
- The U.S. experienced a bigger decline in renewal rates in Q2, the only global region to do so. Weakening rates in D&O liability insurance for public companies was the cause.
- U.S. cyber insurance renewal rate increases moderated in Q2. They came in at just under 7 percent on average. During the previous quarter, the average increase was 12 percent.
- As has been widely reported, global insured catastrophe losses increased to $27 billion in the 2016 first half versus $19 billion in the 2015 first half. Marsh said this could force some insurers to begin reconsidering rates if the trend continues.
- Cyber insurance has been a hot sector for the United States—one of the few with strong renewal rate increases—but there are signs that this is slowing. Renewal rate increases grew 6.9 percent in the second quarter versus a 12 percent average hike in Q1.