Average Commercial Insurance Prices Jumped 11 Percent in Q4: Marsh

Global average commercial insurance prices increased 11 percent in the fourth quarter of 2019, according to the Global Insurance Market Index released by insurance broker Marsh.

The fourth-quarter rise in prices was the largest year-over-year increase in the Marsh Global Insurance Market Index since its inception in 2012, and it was the ninth consecutive quarter of average price increases.

Average price increases were driven principally by increases in property insurance rates as well as financial and professional lines, Marsh said.

The survey also found:

• Globally, on average, pricing for property risks increased 13 percent; financial and professional lines rose nearly 18 percent; and casualty increased 3 percent.
• Composite pricing in the fourth quarter increased in all geographic regions for the fifth consecutive quarter.
• Regional composite prices increased by 10 percent in the U.S.; 14 percent in the U.K.; 7 percent in Continental Europe; 7 percent in Latin America and the Caribbean; 6 percent in Asia; and 21 percent in the Pacific region. The Pacific region’s price increase of 21 percent was the largest composite increase in the index, largely driven by increases in directors and officers (D&O) rates, as well as increases in property.

Overall property prices in the regions were reported by Marsh as:

• U.S. property prices rose by 18 percent in the fourth quarter (the ninth consecutive quarter of U.S. price increases and the highest level recorded since the survey began in 2012).
• UK property prices increased 8 percent in the fourth quarter.
• Continental Europe saw property prices rise 10 percent, the fifth consecutive quarterly increase. Property prices saw a steady rate of increase during 2019 after multiple years of flat or declining prices.
• The Pacific region saw property price hikes of 18 percent, which was the eighth consecutive quarter of year-over-year, double-digit increases.
• The Asia region’s property prices rose 7 percent, with international carriers seeking increases across the region.
• Latin America’s property prices increased 9 percent, the second consecutive quarter of price hikes after being flat, or declining, for the previous six years.

Overall regional casualty pricing trends were reported as:

• U.S. casualty prices increased 2 percent in the fourth quarter, largely driven by the excess liability market where prices increased nearly 10 percent. Other U.S. casualty pricing trends saw auto rates up by 5 percent and workers compensation pricing down by 4 percent in the fourth quarter, as well as down for the full year.
• UK casualty prices increased overall by 3 percent.
• Continental Europe saw casualty price increases of 3 percent, which was just the fourth quarterly increase seen in the last six years. Overall casualty prices have risen for two consecutive quarters, after several years of continuous but minor decreases. Both general liability and workers compensation were either stable or saw low-single-digit increases in nearly every country.
• The Pacific region saw casualty pricing rise 6 percent during the fourth quarter, a trend of mid-single-digit increases that has continued for three years.
• The Asia region’s casualty prices were flat in the fourth quarter, the seventh consecutive quarter of flat rates.
• Latin America’s casualty prices rose 2 percent and have increased every quarter for three years.

“The impact of natural catastrophe losses and increasing concern about litigation trends have led to price increases for many insurance buyers. Global pricing has now increased every quarter for two years, and while capacity largely remains strong, there has been tightening in certain product lines and regions,” said Dean Klisura, president, Global Placement and Advisory Services at Marsh, in a statement accompanying the report.

Source: Marsh

*This story ran previously in our sister publication Insurance Journal.