Global commercial insurance pricing up 15% in second quarter of 2021 as rate increases continue to moderate; cyber rates rise on increased losses
Global commercial insurance prices increased 15% in the second quarter of 2021, according to the Global Insurance Market Index, 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 and 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.