Vice President, Corporate Communications, Marsh Asia+65 8468 9567
Singapore, October, 28, 2021 – Global commercial insurance prices increased 15% in the third quarter of 2021, according to the Global Insurance Market Index released today by Marsh, the world’s leading insurance broker and risk advisor, the same rate of increase recorded in the previous quarter. While this is the 16th consecutive quarter of increases, the rate of increase continues to moderate in many lines of business and in most geographies. This trend may suggest that pricing increases peaked in the fourth quarter of 2020, at 22%.
Pricing increases across most regions moderated due to a slower rate of increase in property insurance and directors’ and officers’ liability (D&O). The UK, with a composite pricing increase of 27% (down from 28% in Q2 2021) and the Pacific region, with a 17% increase (down from 23% in Q2 2021) continued to drive the global composite rate. The rate of increase in Asia was 6% (steady from the previous quarter), 2% in LAC (down from 4%), and 10% in Continental Europe (down from 13%). The one exception was the US where rates increased by 14% (up from 12% the previous quarter), driven by substantial increases in cyber insurance rates and a moderate increase in property and casualty rates.
Among other findings, the survey noted:
Pricing in Asia increased by 6%, led by a 17% increase in financial and professional lines pricing. Philippines, Thailand and Singapore had the highest increase in third quarter of 2021.
Financial and professional lines in Asia continues to be a fragmented marketplace, with differentiated pricing between clients. Insurers remained selective on US-listed D&O liability with rate increases ranging from 50% to 100%, displayed varied appetite for financial institution clients, and focused on risk selection driven by global underwriting guidelines. Cyber insurance, with ransomware losses as the key driver, faced considerable pressure on pricing and deductibles with a marked reduction in capacity and narrowing of key coverages.
Property insurance pricing rose by 5% — the 12th consecutive quarter of increases and lower than the 7% increase in the previous quarter. The continued slowdown in pricing compared to previous quarters is a trend expected to continue into 2022 barring any major loss activity. Capacity remained available, but challenges remained for clients in high hazard industries, natural catastrophe (CAT) zones, and those with poor loss histories. Casualty insurance pricing increased 1%, remaining relatively flat as it has for three years with sufficient capacity, although risk selection was more pronounced and challenges existed in product recall and products liability.
Commenting on the report, Lucy Clarke, President, Marsh Specialty and Marsh Global Placement, said: “While the risk and insurance landscape remains challenging around the world, we expect rates to continue to moderate in most lines. However, the pressure on rates in cyber insurance is likely to continue. Developing solutions for our clients in this segment remains a top priority for Marsh.”
Marsh is the world’s leading insurance broker and risk advisor. With around 40,000 colleagues operating in more than 130 countries, Marsh serves commercial and individual clients with data-driven risk solutions and advisory services. Marsh is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people. With annual revenue over $18 billion, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. For more information, visit mmc.com, follow us on LinkedIn and Twitter or subscribe to BRINK.