Skip to main content

Global Insurance Market Update

UK Pricing Q4 2022

Insurance pricing in the UK increased 4% in the fourth quarter, compared to 7% in the third quarter.
Skyline of London over Tower Bridge on the Thames

Financial and professional lines decline, cyber pricing moderates

Insurance pricing in the UK increased 4% in the fourth quarter, compared to 7% in the third quarter.

Constant bar chart represents Global Insurance Composite Pricing Change.

Property insurance pricing increased 6%, the same as in the prior quarter.

  • Property insurance pricing continued to plateau, making a somewhat less volatile environment for clients.
  • The market was competitive for low- to medium-hazard industries, but pricing challenges remained for those with major losses or a challenging occupancy or process, such as food production, warehousing, or waste recycling.
  • Insurers focused on the inflationary environment around claims, including by increasing pricing if exposure bases were not correctly reviewed.

Casualty insurance pricing increased 4%, the same as in the prior two quarters.

  • There was a slight reduction in the pressure to increase pricing in the quarter, influenced by existing long-term agreements (LTAs), remarketing exercises, and restructuring of programs.
  • For auto liability, the average cost of a claim increased by 7% to 11% over the past year, primarily due to the cost of parts and service, which is indicative of vehicle materials and technology becoming more sophisticated and requiring specialists.
    • Electric vehicles continued to impact the auto insurance market, with insurers citing repair costs that are 20% to 75% higher than cars with combustion engines.

Financial and professional lines pricing declined 4% after being flat in the third quarter. 

  • D&O pricing declined, with decreases generally in the 10% to 15% range.
    • D&O pricing was influenced by factors including an increase in market capacity and a lack of premium-generating M&A activity.
    • Program savings were largely driven by excess layer reductions.
  • Financial institutions (FIs) continued to experience rate reductions between 5% and 10% as insurers sought to increase their business and the market saw new entrants, increasing competition. 
  • New capacity in commercial crime coverage entered the market, leading to moderating pricing increases and stabilizing buying conditions.

Cyber insurance pricing increased 34%, compared to 66% in the third quarter.

  • As losses continued to improve, the cyber insurance market trend was toward a moderation in pricing increases and somewhat broader coverage.
  • Some industries, such as manufacturing, experienced higher rate increases than others.
  • Competition increased in the cyber market in the second half of 2022, from both new and existing insurers in the UK and internationally.

This document and any recommendations, analysis, or advice provided by Marsh (collectively, the ‘Marsh Analysis’) are not intended to be taken as advice regarding any individual situation and should not be relied upon as such. This document contains proprietary, confidential information of Marsh and may not be shared with any third party, including other insurance producers, without Marsh’s prior written consent. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modelling, analytics, or projections are subject to inherent uncertainty, and the Marsh Analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Except as may be set forth in an agreement between you and Marsh, Marsh shall have no obligation to update the Marsh Analysis and shall have no liability to you or any other party with regard to the Marsh Analysis or to any services provided by a third party to you or Marsh. Marsh makes no representation or warranty concerning the application of policy wordings or the financial condition or solvency of insurers or re-insurers. Marsh makes no assurances regarding the availability, cost, or terms of insurance coverage. LCPA 22/030