Asia Pricing Q3 2021

Asia Insurance Market: Increases Continue to Moderate

Insurance pricing in the third quarter of 2021 in Asia increased 6% year-over-year.

Global commercial insurance prices rose 15% in the third quarter of 2021, the sixteenth consecutive quarter of price increases; in Asia, prices increased 6% year-over-year. 

A proprietary measure of global commercial insurance premium pricing change at renewal, representing the world's major insurance markets and comprising nearly 90% of Marsh's premium. It appears, barring unforeseen changes in conditions, that global composite pricing increases peaked in the fourth quarter of 2020, at 22%. 

Increases were again seen across all geographies and most major product lines in the third quarter. Regionally, composite pricing increases for the third quarter were as follows: 

• Asia: 6% 
• Pacific: 17% 
• US: 14%
• UK: 27%
• Continental Europe: 10%
• Latin America and the Caribbean: 2%

Among other findings, the survey noted:

• Global property insurance pricing was up 9% on average, down from the 12% increase in the second quarter 2021; casualty pricing was up 6% on average, which was the same as the prior two quarters.
• Pricing in financial and professional lines had the highest rate of increase across the major insurance product categories, at 32%, compared to 34% in the second quarter and 40% in the first quarter.
• Cyber insurance pricing again bucked the moderation trend and rose significantly in the quarter — up 96% in the US and 73% in the UK — driven by the frequency and severity of ransomware claims. 

Asia Findings

Property insurance pricing across Asia rose 5%, the twelfth consecutive quarter of increases. 

• Capacity remained available; local markets were major contributors as elements of competition returned, focused on loss free clients in low hazard industries.
• There has been a continued slowdown in pricing compared to previous quarters, a trend expected to continue into 2022, barring any major loss activity.
• Challenges remained for clients in high hazard industries, CAT zones, and those with poor loss histories.

Casualty insurance pricing increased 1%, remaining relatively flat as it has for three years.

• Large losses and claims activity drove insurer behavior; risk selection was more pronounced than previously.
• Sufficient capacity remained in the region, although challenges existed in product recall and products liability.

Financial and professional lines pricing rose 17%, the tenth consecutive quarter of increase. 

• Insurers focused on risk selection, driven by global underwriting guidelines and overall appetite.
• Asia continues to be a fragmented marketplace, with differentiated pricing between clients and with countries where pricing movements are not aligned.
• Cyber insurance remained challenging, and faced considerable pressure on pricing and deductibles at the same time there was a marked reduction in capacity and a narrowing of key coverages.
  - Significant ransomware losses were the key driver.
• Insurers remained selective on US-listed D&O liability, with rate increases ranging from 50% to 100% depending on the industry, client profile, and claims history. 
• Insurer appetite varied for financial institution (FI) clients; larger risks generally experienced the highest rise in pricing even as they increased retentions.

Hong Kong SAR

• In Hong Kong SAR, property premium rates increased by 7% on average. 

-  However, local Hong Kong SAR domiciled risks generally saw increases in single digit or flat in certain cases.
-  Global risks and capacity driven clients in Macau SAR experienced increases of 10% or more. 

• Both casualty and employee compensation insurance (ECI) remained competitive. 
• Political violence and terrorism insurance rates decreased after having risen following a period of social unrest. 
• Marine cargo and marine hull rose modestly following a decrease in market capacity. 
• In financial and professional lines, D&O, professional indemnity (PI), and cyber insurance experienced substantial increases. 

-  For D&O, the scale of increases was reduced from prior quarters. 
-  For cyber and crime, insurers remained selective. 
-  For PI, rates generally increased following years of reductions.

For full insights into Global and Asia insurance market pricing, download the reports (in PDF format) below.