Pacific Pricing Q2 2022

D&O pricing declines for first time since 2017

Insurance pricing in the Pacific region increased 7%, down from 10% in the prior quarter and the sixth consecutive quarterly reduction in rate increases.

Property insurance pricing rates increased 5%, down from 8% in the prior quarter, despite severe flood events in Queensland and New South Wales.

• Insureds in CAT zones, especially flood, faced increased underwriting focus, including on contingent business interruption, deductibles, and risk mitigation.
• A demonstrable commitment to continual risk improvement was critical to renewal success.
• Valuations have become a major underwriting focus for insurers due to global inflation.

Casualty insurance pricing rose 11%, down from 15% in each of the three prior quarters.

• Insurers remained cautious due to claims inflation; with available capacity reduced, programs often experienced placement challenges.
• Risk selection has been more pronounced than in the past.
• Major programs underwent substantial restructuring of layers as a result of changing underwriter appetite.

Financial and professional lines pricing rose 6%, a decrease from 10% in the prior quarter.

• The 5% decrease in pricing in the D&O market was the first reduction since 2017.
• Competition continued to develop, particularly for excess layers, resulting in improved pricing.
• Cyber insurance remained challenging, driven by frequent and severe ransomware losses.