Rate of increases in all major coverage areas decelerate
Insurance pricing in the first quarter of 2022 in the UK increased 20%, compared to 22% in the fourth quarter of 2021.
Constant bar chart represents Global Insurance Composite Pricing Change.
Property insurance pricing increased 9%, compared to 10% in the fourth quarter of 2021.
Significant pricing increases were largely imposed on clients with major loss activity or a challenging occupancy or business process, such as food production, warehousing, or waste recycling.
Insurers have moved from seeking to impose blanket price increases to targeting specific areas of the book they believe are underpriced or impacted by loss.
Insurers demonstrated a greater ambition to grow their books to take advantage of the current rating environment.
Casualty insurance pricing increased 3%, compared to a 4% increase in the prior quarter.
Employers’ liability pricing was similar to that of the prior quarter.
Electric vehicles (EV) impacted the auto insurance market significantly, with damage repair costs on electric vehicles running approximately 25% higher than cars with internal combustion engines; parts are hard to source and EV repair specialists in short supply.
Insurers continued to target rate uplifts in the casualty market, with the main driver being claims inflation; however, the level of uplift continues to be on a case-by-case basis.
Long-term agreements were more readily available, including three-year options, which were previously difficult to secure.
Sanctions, cyber, and non-standard coverages continued to be challenging; providing additional underwriting information remains vital to finalizing placement.
Financial and professional lines pricing, driven by cyber, increased 39%, continuing the decline from the 43% rise in the fourth quarter of 2021.
The rate of increase for D&O was 16% in the first quarter, compared to 24% in the fourth quarter of 2021, demonstrating a degree of moderation.
Clients impacted by increased risks during the pandemic saw sizeable reductions, though some small- to mid-size enterprises still experienced increases.
Some financial Institution clients experienced flat rates, and in some cases, small rate reductions.
Cyber insurance pricing increased by 102%, again driven by ransomware claims; with continued market deterioration and reduction in capacity, many clients turned to self-insured retention, as well as co-insurance.
Commercial crime coverage pricing increased 25% to 30%.