UK Pricing Q3 2021

UK Pricing: Sixteenth Consecutive Quarter of Increases

Insurance pricing in the third quarter of 2021 in the UK increased 27%.

Property insurance pricing increased 11%.

• Larger organizations generally experienced price increases ranging from 10% to 15%, which reflected a deceleration in the rate change compared to recent quarters.
• Most renewals from insurers were less volatile than was the case in 2020 and the first half of 2021, in part a reflection of increased competition from alternative markets.
• The claims environment remained challenging due to COVID-19 claims disputes concerning interpretation and application of policy wording.
• Cyber and communicable disease restrictions continued to be applied to policies.

Casualty insurance pricing increased 7%.

• Conditions were more volatile for excess of loss coverage. Scrutiny around sanctions, cyber, and COVID-19 were commonplace, meaning a longer timeframe and the provision of additional information remains vital to finalize a placement successfully.
• Although the motor liability market pushed for increases in the first three quarters of 2021, competition increased for conventional private car and light commercial fleets.
• The outlook for rate increases for the next renewal period remained stable.

Financial and professional lines pricing increased 54%, largely due to D&O liability.

• D&O rate increases declined significantly, from 121% in the second quarter to 61% in the third as insurers showed increased appetite and competition.
• The cyber insurance market continued to deteriorate, with capacity reducing and rates rising. Some clients experienced triple-digit increases in the quarter, driven largely by ransomware.
• Financial institution (FI) clients generally saw smaller increases compared to previous quarters.
• Commercial crime rates increased 50% to 60%, with a limited number of insurers writing this line.