The historic cluster of natural catastrophes that struck in late 2017 helped nudge average global commercial insurance pricing higher during the fourth quarter—the first increase since early 2013, according to Marsh’s latest market index report.
That’s the first average commercial insurance pricing increase in 18 quarters, in case you’re counting. Before then, the industry tallied more than four-and-a-half years of quarterly average rate decreases for the sector.
Average pricing ticked up by 0.8 percent in Q4 versus a 1.9 percent decrease in the 2017 third quarter. Global property insurance pricing helped drive the overall number higher with a 3.2 percent increase compared to a 2.4 percent decline in the previous quarter, Marsh said.
“Losses from Hurricanes Harvey, Irma and Maria and wildfires in California drove increases in property pricing in the U.S.,” Dean Klisura, president of Global Placement and Specialties at Marsh, said in prepared remarks.
He noted that market capacity continues to remain ample even with property pricing increases.
“Pricing in all global regions showed either a moderate increase in the fourth quarter or a slowing of the pace of decrease,” Klisura said.
Other report highlights:
- Financial and professional lines pricing inched 0.1 percent higher in the fourth quarter, but casualty pricing dipped 1.5 percent. In the third quarter, financial and professional lines decreased by 1.4 percent, and casualty pricing declined by 1.7 percent.
- U.S. cyber insurance pricing increased by an average 0.6 percent in Q4, after three quarters of declines. Marsh pointed out that capacity keeps growing as new insurers enter the space and existing ones expand their cyber coverage capacity, which keeps pricing competitive. However, price hikes keep hitting sectors that dealt with the most cyber events, including retail and health care.
- Average pricing increased in the U.K., Latin America and Australia but dipped in Asia, Continental Europe and the U.S. (but at slower rates than in the previous quarter).
The full report is Marsh’s Global Insurance Market Index.