Global commercial insurance pricing rocketed 20 percent higher on average in the 2020 third quarter, driven largely by rate hikes in three key lines, according to a new Marsh market update.
Marsh said the jump was the largest since launching its Global Insurance Market Index in 2012. It also follows average rate increases hitting 19 percent in the 2020 second quarter and 14 percent in Q1.
Property insurance rates along with financial and professional lines drove most of the rate hike momentum, Marsh said. Global property insurance pricing grew 21 percent, and global financial and professional lines saw rate increases hitting 40 percent on average.
Lucy Clarke, President, Marsh JLT Specialty and Marsh Global Placement, said the rate hikes are stemming largely from pandemic-related market uncertainty.
“Uncertainty, particularly related to COVID-19, and loss experience in many lines have both contributed to this three-year trend of increasing insurance costs,” Clarke said in prepared remarks. “For many clients these conditions are occurring at a time when they can least withstand them, and are leading many companies to rethink their insurance buying patterns including increasing retentions, reducing limits, and modifying policy terms and conditions.”
Among the Marsh report’s additional Q3 findings:
Source: The Marsh Global Insurance Price Index