The latest Global Insurance Market Index from Marsh reports that global commercial insurance prices increased 15% in the second quarter of 2021 – marking 15 straight quarters of rate increases.
Marsh also noted that Q2 2021 is the third consecutive quarter to show a fall in the average rate of increase, following the year-over-year average increases of 18% in Q1 2021 and 22% in Q4 2020.
The increases in commercial insurance pricing worldwide moderated due to slower rate rises in property insurance (except in Europe), as well as in financial and professional lines (except in Asia and Latin America & the Caribbean), the report said. The global composite rate was driven by 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).
Region-wise, the rate of increase in the US was 12% (down from 14%), in Asia 6% (down from 8%), in LatAm/Caribbean 4% (down from 5%), and in Continental Europe 13% (down from 15%).
Other key findings of Marsh’s report include:
- 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.
“Clients continue to face a challenging risk and insurance landscape as the global economy emerges from the pandemic,” commented Marsh Specialty and Marsh Global Placement president Lucy Clarke.
Clarke added that while Marsh expects continued pressure on pricing – particularly in loss-affected lines – the company also anticipates a general trend of moderating price increases for the rest of the year.