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.
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.