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Global Insurance Market Index

US Pricing Q3 2021

Insurance pricing in the third quarter of 2021 in the US increased 14%, year-over-year

US Pricing: Increases Continue, Led by Cyber

Insurance pricing in the third quarter of 2021 in the US increased 14%, year-over-year. This was a slight rise in the rate of increase following three consecutive quarters of a declining rate of increase.

US Insurance Pricing - Q3 2021

Property insurance pricing increased by 10%, the sixteenth consecutive quarter of increase.

  • The quarter’s slight uptick in rate change from the second quarter was partly driven by fewer renewals compared to other quarters, as well as the type of industries that generally renew in the third quarter, including manufacturing and other more technical risks.
  • Clients that had experienced significant losses, were considered to have relatively poor risk quality, or had significant exposure to secondary catastrophe (CAT) perils experienced above average rate increases. Clients with no losses, good risk quality, and were in a sought-after industry class had a better experience.
  • More than ever, insurers focused on secondary CAT perils - including wildfire, convective storm, and flood.
  • The market deteriorated for clients predominantly exposed to wildfire, a trend that is expected to continue.
  • Carriers scrutinized contingent time element coverage, especially for unnamed suppliers, following several large per-risk losses.
  • Insurers continued to push for tighter terms and conditions, including deductibles, cyber and communicable disease exclusions, and time element extensions.

Constant bar chart represents Global Insurance Composite Pricing Change.

Casualty insurance pricing in the US increased 6%; excluding workers’ compensation the increase was 11%.

  • Workers’ compensation continued to be the driving factor of competition among primary carriers, which would typically agree to lower rate increases on the general liability (GL) and auto lines as long as the WC line was profitable.
  • GL remained an area of concern for insurers, driven by the continued rise in settlements and jury verdicts.
  • In excess liability, clients generally experienced a continued deceleration in rate increases as compared to earlier quarters, driven by market competition.

Financial and professional lines pricing increased 27%, largely driven by cyber insurance.

  • D&O pricing for publicly traded companies increased 10%, lower than the 15% increase observed in the second quarter and the lowest since the first quarter 2019.
    • Results showed the positive impact from new capacity in the US, Bermuda, and UK, most of which is focused on mid- to high-excess D&O layers.
    • Many clients experienced a retention increase of greater than 50%; premiums still increased with these changes.
    • Lead Side A D&O pricing stabilized, with single-digit increases on most renewals.
    • Challenges continued for renewals within certain industry segments, including life science, technology, and specialty retail; companies that are financially constrained; companies with prior or current claims; and initial public offerings, special purpose acquisition companies, and de-SPACs.

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”