Global Commercial Insurance Rates Rise 9%, Continuing Moderating Trend: Marsh

Global commercial insurance prices increased 9 percent in the second quarter of 2022 (down from an 11 percent increase in Q1), continuing a trend of moderating rate increases that began in Q1 2021, according to the Global Insurance Market Index released by insurance broker Marsh.

Average price hikes across most regions moderated due to slower rates of increase, and some decreases, in certain financial and professional lines, Marsh said.

Cyber insurance pricing continued to rise significantly, although the pace of increase slowed in the quarter, to 79 percent in the U.S. and 68 percent in the UK compared to 110 percent and 102 percent, respectively, in the prior quarter.

The UK, with a composite pricing increase of 11 percent (down from 20 percent in Q1 of 2022), experienced the largest decline in average price increases.

In the U.S., prices increased by 10 percent (down from 12 percent in Q1 2022), in the Pacific by 7 percent (down from 10 percent), in Latin America and the Caribbean by 5 percent (down from 6 percent), in Asia by 3 percent, and by 6 percent in Continental Europe (both the same as the previous quarter).

Among other findings, the Marsh survey noted:

• Global property insurance pricing was up 6 percent on average in the second quarter of 2022, down from a 7 percent increase in Q1 2022.
• Casualty pricing was up 6 percent on average compared to 4 percent in the previous quarter.
• Overall pricing in financial and professional lines, driven by cyber, again had the highest rate of increase across the major insurance product categories, at 16 percent. However, this was down from 26 percent in the previous quarter.
• Rates for directors and officers insurance declined in the U.S., UK and Pacific.
• The adequacy of valuations for insured or replacement values has become a focal point for insurers, driven by concerns about inflation, supply chains and labor shortages, as well as claims inflation in cases where adjusted loss amounts exceed reported values.
• In the U.S., clients with significant losses or exposure to secondary catastrophe perils – including wildfire, convective storm and pluvial flood – typically experienced above average increases.

“At a time of global business uncertainty, driven by the ongoing war in Ukraine, supply chain disruption and rising inflation, trading conditions remain tough for many clients. We are also seeing the impact of rising inflation on insured values and exposure growth, which has the potential to impact pricing and insurer appetite,” commented Lucy Clarke, president, Marsh Specialty and Global Placement, in a statement.

Source: Marsh