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Global Insurance Market Index

2021 Q2 Update

Australia-Pacific insurance markets: Prices increase in first quarter, but at slower pace. Overall insurance pricing in the second quarter of 2021 in the Pacific region increased 23%, continuing an upward trend that began in 2015.

For the second consecutive quarter, the overall increase in insurance pricing in the region was less than in the prior quarter, according to the latest Marsh Global Insurance Market Index.

The global trend was similar, as overall commercial insurance prices rose 15% in the quarter, the fifteenth consecutive quarter of global price increases. It appears, barring unforeseen changes in conditions, that global pricing increases peaked in the fourth quarter of 2020, at 22%.

In the below video, John Donnelly, Marsh’s Head of Global Placement Asia and Pacific, provides a snapshot on the Pacific region’s pricing movements and key drivers in Q2, and what we can expect to see for the rest of 2021.

All major coverage lines continue to increase in Pacific region

Geographically, the UK, with a composite pricing increase of 28%, and the Pacific region, with a 23% increase, drove the global composite rate. In the Pacific region:

Property insurance pricing increased 14%, down from an increase of 20% in the prior quarter.

  • While rates continued to increase, a trend toward lower increases was evident.
  • Some competition returned to the market for quality, loss-free clients.
  • Difficulties remained for high-hazard industries, risks in catastrophe (CAT) zones, and clients with poor loss records.

Casualty insurance pricing rose 18%, the largest year-over-year increase since 2012 and up from a 17% increase in the first quarter.

  • Liability pricing continued to increase, with a stronger emphasis on policy wording reviews.
  • Major programs underwent substantial restructuring of layers as underwriters changed their appetite for excess layers.

Financial and professional lines pricing rose 37%, marking 16 consecutive quarters of double-digit increases.

  • Despite new excess layer capacity entering the market, D&O liability pricing continued to be significant, albeit leveling out compared to previous quarters.
  • Professional indemnity premiums increased and capacity tightened.
  • Cyber premiums increased significantly, driven by increased frequency and severity of ransomware losses, in line with the global trend. Capacity reduced and many programs were not able to complete historical limits.

Constant bar chart represents Global Insurance Composite Pricing Change.

Global insurance pricing

Increases across all geographies moderated in the second quarter due to a generally slower rate of increase in property and financial and professional lines.

Cyber insurance pricing diverged from the trend, with prices increasing by 56% in the US and 35% in the UK, driven by the frequency and severity of losses. 

Regionally, composite pricing increases for the second quarter were as follows:

  • UK: 28%
  • Pacific: 23%
  • Continental Europe: 13%
  • US: 12%
  • Asia: 6%
  • Latin America and the Caribbean: 4%

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

  • Property insurance: 12%
  • Casualty insurance: 6%
  • Financial and professional lines insurance: 34%

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, some higher and some lower.

LCPA No. 21/222

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