Pacific Pricing Q4 2021

Pacific Pricing: Rate of Increase Declines, Matches Global Pace

Insurance pricing in the Pacific region increased 13%, down from 17% in the prior quarter and the fourth consecutive in which the rate of increase slowed. It was the first time since 2016 that composite pricing in the region was not higher than the global average.

Property insurance pricing increased 8%, the fourth consecutive quarter in which the pace of pricing increases declined.

• Insurance capacity increased for quality, loss-free clients.
• Challenges remained for high-hazard industries, risks in CAT zones, and clients with poor loss history.
• Exposure to secondary CAT perils — such as hail, bushfire, and drought — remained particular concerns.

Casualty insurance pricing rose 15%, the same as in the prior quarter.

• Pricing in the casualty market remained challenging, due in large measure to claims inflation and reduced capacity from some major carriers.
• Risk selection was more pronounced than previously.
• Some major programs underwent substantial restructuring of layers.

Financial and professional lines pricing rose 18%, down from 25% in the third quarter.

• The levelling out of pricing in D&O programs continued.
• Competition developed, particularly for excess layers, resulting in improved pricing for some clients.
• Professional indemnity premiums again increased as capacity continued to tighten.
• Cyber risk insurance remained challenging, mainly due to frequent and severe ransomware losses that put pressure on pricing and deductibles and brought a marked reduction in capacity and narrowing of key coverages.