Global Insurance Market Update

Pacific Pricing Q1 2022

Insurance pricing in the Pacific region increased 10%, down from 13% in the prior quarter and the fifth consecutive quarterly reduction in rate increase.

January 10, 2019. Sydney, Australia. Landscape aerial view of Sydney Opera house near Sydney business center around the harbour.

Australia-Pacific Insurance Markets: Price Increases Continue to Moderate in Fourth Quarter

Insurance pricing in the Pacific region increased 10% in the first quarter of 2022, down from 13% in the prior quarter. This also marked the fifth consecutive quarterly reduction in rate of increase. This quarter, average price increases in the Pacific region were one percentage point lower than the global average in the Marsh Global Insurance Market Index*. 

The index showed overall global commercial insurance prices rose 11% in the first quarter of 2022, marking the fifth consecutive reduction in rate increase since global pricing increases peaked at 22% in the fourth quarter of 2020.

Constant bar chart represents Global Insurance Composite Pricing Change.

Flood losses spur rate of increases in Pacific Region

Geographically, the UK, with a composite pricing increase of 20%, drove the global composite rate alongside the US and the Pacific regions, which both had rates in double figures (12% and 10% respectively). In the Pacific region:

Property insurance pricing increased 8%, mirroring the rate increase in the fourth quarter of 2021.

  • The near AU$3 billion market loss from the New South Wales and Queensland floods curtailed any pricing relief expected for the start of the year
  • Challenges have increased for risks in CAT zones, with flood a particular concern.
  • Clients experienced an increased underwriting focus on CAT sub-limits, including contingent business interruption, deductibles, and risk mitigation.

Casualty insurance pricing rose 15%, the same rate of increase for the third consecutive quarter.

  • Pricing in the casualty market remained challenging, due in large measure to claims inflation and reduced capacity from some major carriers.
  • Risk selection continues to be more pronounced than in previous quarters.
  • Changing underwriting appetite continues to spur substantial restructuring of layers for some major programs.

Financial and professional lines pricing rose 10%, a decrease from 18% in the prior quarter.

  • The leveling out of pricing in D&O programs continued.
  • Competition among insurers, particularly for excess layers, continued to improve pricing for some clients.
  • Professional indemnity premiums again increased as capacity continued to tighten.
  • Cyber risk insurance remained challenging, mainly due to frequent and severe ransomware losses that put pressure on pricing and deductibles and brought a marked reduction in capacity and narrowing of key coverages.

Global Insurance Pricing

Pricing increases were again seen across all geographies, though there was significant moderation in nearly all markets. Regionally, composite pricing increases for the first quarter of 2022 were as follows (see Figure 1): 

  • Pacific: 10%.
  • US: 12%.
  • UK: 20%.
  • Continental Europe: 6%.
  • Latin America and the Caribbean: 6%.
  • Asia: 3%. 
     

Pricing in financial and professional lines again had the highest rate of increase across the major insurance product categories: 

  • Property insurance: 7%.
  • Casualty insurance: 4%.
  • Financial and professional lines insurance: 26%. 
     

It is important to note that reported pricing changes are averages and that the data used to estimate the changes cover a wide range of clients in terms of size, industry, location, claims history, and other parameters. Many clients received pricing changes that deviated from the average.

We invite you to read the full Global Insurance Market Index Fourth Quarter 2021.

If you would like more information about pricing or other risk and insurance issues, please reach out to your Marsh representative.


*Note: All references to pricing and pricing movements in this report are averages, unless otherwise noted. For ease of reporting, we have rounded all percentages regarding pricing movements to the nearest whole number.

This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any modelling, analytics, or projections are subject to inherent uncertainty, and any Marsh analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change. LCPA 22/196.

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