UK Pricing Q2 2022

Financial and professional lines pricing moderates

Insurance pricing in the second quarter of 2022 in the UK increased 11%, compared to 20% in the first quarter.

Property insurance pricing rates increased 6%, compared to 9% in the first quarter.

• Pricing was most challenging for clients with natural catastrophe (CAT) exposures and those in the food, waste, warehousing, and chemical industries.
• There has been a noticeable absence of major CAT losses this year.
• More clients with low/medium hazard risks experienced rate reductions.
• Some insurers sought to offset challenging exposures by packaging property coverage with motor and casualty.
• Underwriters demonstrated concern regarding valuation, putting focus on property damage and business interruption estimates.

Casualty insurance pricing increased 4%, compared to a 3% increase in the prior quarter.

• Electric vehicles impacted the automobile liability insurance market, with leading insurers saying that damage repair costs for EVs run approximately 25% higher than for internal combustion vehicles.
• Employers’ liability insurance pricing increased by 4%, compared to 3% in the prior quarter, driven by poor claims performance among some insureds.
  • US exposure remained a challenge.

Financial and professional lines pricing experienced a decline in some products, although the overall average rate increased due to the impact of continued increases in cyber insurance.

• D&O pricing declined in the single digits in the second quarter.
  • The D&O market experienced substantial rate decreases on larger multinational accounts.
  • Midsize and smaller companies continued to experience rate increases or flat renewals.
• The cyber insurance market continued to be challenging, although the rate of increase moderated to 68%, compared to 102% in the first quarter.
  • Some insureds continued to experience increases in the triple digits.
• Pricing for financial institutions (FIs) continued to moderate as insurer competition increased.