Average global commercial insurance prices grew by 3 percent in the first three months of 2019, representing the sixth consecutive quarter of price increases for the overall sector, Marsh said in its latest Global Insurance Market Index.
What’s more, the Q1 average price increase for the sector is the largest since Marsh began the survey in 2012, it said. While price hikes appear to be locking in, Marsh insisted that capacity remains robust for the most part.
“While 3 percent is the largest average increase in insurance pricing we have seen since the index began in 2012, market capacity remains strong in most products and geographies,” Dean Klisura, president, Global Placement at Marsh, said in prepared remarks.
Not all prices trended higher. Casualty prices, for example, declined globally at 0.7 percent, continuing a trend of year-over-year declines stretching back to 2013.
In the U.S., insurance pricing in the 2019 first quarter grew by 1.1 percent. Casualty pricing, which has decreased in the U.S. in all but one quarter since 2014, did so again, down 1.7 percent.
Other findings from the first-quarter report:
- Composite pricing in Q1 increased in all global regions for the second consecutive quarter, driven by rate change in property and directors and officers (D&O) coverages.
- Regionally, Pacific had the largest price increases in the index (>10 percent), a trend that has continued for eight quarters. The U.K. and Continental Europe both reported average price increases of 2 percent or higher.
- Globally, pricing for property risks increased by almost 5 percent on average, slightly above the rates recorded in the previous four quarters. Casualty prices declined nearly 1 percent on average, continuing a trend started in 2013.
- Average pricing in financial and professional lines increased by almost 6 percent. All global regions experienced a rise, primarily driven by increases in D&O insurance.
For Marsh’s U.S. composite pricing, increases were at the highest rate since 2013. Other U.S. findings:
- Property pricing increased 4 percent and has now increased each quarter since late 2017.
- Large, multilayered property programs (with gross written premium greater than $1 million) led the pricing increases, up nearly 7 percent.
- Financial and professional liability insurance rates in the U.S. increased by 2.8 percent, driven by pricing in D&O liability.
- D&O pricing for public companies increased nearly 6 percent in the first quarter, with 77 percent of clients experiencing an increase, the highest percentage of increases in several years.
*A version of this story ran previously in our sister publication Insurance Journal.