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Global Insurance Market Index

2021 Q2 Update

Global commercial insurance pricing up 15% in the second quarter of 2021 as rate increases continue to moderate; the rate of increase in Asia was 6% year-on-year; cyber rates rise on increased losses

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’s the 15th consecutive quarter of rate increases in the global commercial insurance market. It also marks the third consecutive quarter to show a fall in the average rate of increase and follows year-on-year average increases of 18% in the first quarter and 22% in the fourth quarter of 2020.

Increases across all geographies moderated due to generally slower rate rises in property insurance, except Europe, and financial and professional lines, except Asia, Latin America and the Caribbean (LAC). The UK, with a composite pricing increase of 28% (down from 35% in Q1 2021) and the Pacific region, with a 23% increase (down from 29% in Q1 2021) continued to drive the global composite rate. The rate of increase in the US was 12% (down from 14%), in Asia 6% (down from 8%), in LAC 4% (down from 5%), and in Continental Europe 13% (down from 15%).

Among other findings, the survey noted

  • Global property insurance pricing was up 12% on average, down from the 15% increase in the first quarter 2021; casualty pricing was up 6% on average, which was the same as the prior quarter.
  • Pricing in financial and professional lines again had the highest rate of increase across the major insurance product categories, at 34%, compared to 40% in the previous quarter.
  • Cyber insurance pricing again diverged from the moderation trend. In the US prices increased 56% in the US, compared to 35% in Q1, and 35% in the UK, compared to 29% in first quarter, driven by the frequency and severity of ransomware claims.

Asia Findings

In line with other regions, pricing in Asia continues to be driven by property insurance and financial and professional lines. The Philippines recorded the highest composite year-on-year increase for the quarter, at 28%, followed by Singapore and Malaysia, both at 13%.

Property insurance pricing across Asia rose 7%, the 11th consecutive quarter of increase.

  • The moderation of price increases continued across the region, although complexity of property programs, insurer capacity constraints, and a generally low level of competition continue to have an impact.
  • Natural catastrophe (CAT) capacity remained available. Prices continued to increase over 2020, although the pace of increase slowed.
  • The Philippines recorded the highest increase in property insurance pricing (31%), whereas China and Vietnam were the only two markets that recorded a decrease in property insurance pricing (-3% and -4% respectively).

Casualty insurance pricing in Asia remained flat across the region, as it has for three years.

  • Capacity was ample, and the claims environment benign, although challenges remained in product recall and product liability coverage.
  • China, Japan and South Korea generally experienced the largest challenges; along with sectors including automotive, batteries and technology.

Financial and professional lines pricing across Asia rose 24%, the largest increase observed in several years and driven by directors and officers liability (D&O) insurance.

  • Where possible, insurers sought to bring pricing in line with global rates for all financial and professional lines of business. Singapore recorded the highest rate of increase (35%), followed by Hong Kong (27%) and Indonesia (25%).
  • Insurers were highly selective on US-listed D&O, with rate increases ranging from 75% to 100% for some accounts on the primary layers amid limited insurer appetite.
  • There has been an increase in IPO opportunities for listings in US markets, but a handful of Asia markets have limited appetite writing such prospects.
  • The cyber insurance market in Asia, as with all regions, continues to face considerable upward pressure on rates and deductibles with a reduction in capacity and narrowing of key coverage—predominantly driven by frequency and severity of ransomware losses.

Constant bar chart represents Global Insurance Composite Pricing Change.