Average global cyber insurance prices continued to moderate in the first quarter, with average price increases of 11 percent compared to 28 percent in Q4 2022, according to the Global Insurance Market Index published by insurance broker Marsh.

This was particularly evident in the largest cyber insurance markets, with prices rising by 11 percent in the U.S. and 10 percent in the UK, compared to 28 percent and 34 percent, respectively, in Q4 2022, said Marsh, explaining that moderating cyber rates can be attributed to new market entrants bringing increased capacity and competition.

On the other hand, property insurance pricing increased in most regions in the first quarter, led by the U.S. which rose by 17 percent compared to an 11 percent rise in the prior quarter. On average, global property insurance pricing was up 10 percent in Q1 2023 compared to a 7 percent increase in Q4 2022.

Pricing moderation also was seen in average global commercial (composite) insurance prices, which increased 4 percent in Q1 2023, the same level as the fourth quarter of 2022, Marsh added.

Q1 marked the 22nd consecutive quarter in which composite pricing rose, continuing the longest run of increases since the inception of the index in 2012, said Marsh, noting that rates peaked at 22 percent in the fourth quarter of 2020.

Pricing increases across most regions moved within a small range compared to the previous quarter as decreases in financial and professional lines, and continued moderation in the cyber market, were offset by increases in property rates, Marsh said.

In the UK, composite pricing increased by 3 percent (down from a 4 percent increase in Q4 2022), in Continental Europe prices rose by 5 percent (down from 6 percent in Q4), and in Asia by 1 percent (down from 2 percent in Q4). In the U.S., pricing increased by 4 percent (up from a 3 percent increase in Q4), in Pacific by 7 percent (up from 5 percent in Q4), and in Latin America and the Caribbean by 8 percent (up from 7 percent in Q4).

Other findings in the survey include:

• Casualty pricing was up 3 percent on average, the same rate as the previous quarter.
• For the third consecutive quarter, average pricing in financial and professional lines fell, driven by further rate reductions in the U.S. and UK. Average global FinPro pricing declined by 5 percent in Q1, compared to a 6 percent decrease in Q4.
• Concerns about the impact of inflation on asset values and claims costs continued to be a focus for insurers. For example, in the U.S. total insured values at renewal increased by 9 percent, on average, during the first quarter.

“We welcome the favorable trends for our clients in D&O and cyber, but continued loss activity in property lines and an increase in the cost of reinsurance and capital, combined with scarcity in certain lines, means that clients continue to face challenging market conditions,” commented Lucy Clarke, president, Marsh Specialty and Global Placement, Marsh, in a statement.

“To help our clients address these issues, we continue to explore ways to bring new capacity to lines where it is most needed, as well as examining captive solutions and capital market alternatives,” Clarke added.

Marsh said all references to pricing and pricing movements in the report are averages, unless otherwise noted. For ease of reporting, all percentages regarding pricing movements are rounded to the nearest whole number.

Source: Marsh