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