Global commercial insurance prices rose 11% in the first quarter, according to Marsh’s Global Insurance Market Index. This continues a trend in moderating rate increases that began in the first quarter of 2021. While this is the 18th consecutive quarter of increases, the rate of increase continued to moderate across most lines of business and in almost all regions, Marsh said.
Pricing increases across most regions slowed in financial and professional lines. The UK, with a composite pricing increase of 20% (down from 22% in Q4 of 2021), and the US, with a pricing increase of 12% (down from 14%), continued to drive the global composite rate. The rate of increase in the Pacific region was 10% (down from 13%), in Asia 3% (down from 4%), and in continental Europe 6% (down from 9%).
For the second straight quarter, the Latin America and the Caribbean region bucked the moderating trend. In that region, rates increased by 6% in Q1, up from 4% the previous quarter.
The survey also found:
- Global property insurance pricing was up 7% on average in Q1, down from an 8% increase in the previous quarter. Casualty pricing was up 4% on average, down from 5% in the previous quarter
- Pricing in financial and professional lines – driven largely by cyber – saw the highest rate of increase across the major insurance product categories at 26%. However, that was down from 31% in the previous quarter due to a slower rate of increase for directors' and officers' insurance
- Cyber insurance rates continued to rise, driven by the continued increase in the frequency and severity of ransomware claims. Many insurers sought to tighten coverage terms and conditions, especially in relation to the Ukraine conflict. Prices increase 110% in the US (down from 130% in the previous quarter) and 102% in the UK (up from 92%)
- Increases in inflation are impacting claims in several lines of business and have been flagged as a concern by insurers in affected regions
“The war in Ukraine, while most importantly a humanitarian tragedy, has added pressure to what is already a challenging insurance market for our clients,” said Lucy Clarke, president of Marsh Specialty and Marsh Global Placement. “We are also beginning to see the impact of rising inflation on loss costs and exposure growth, which in turn could affect pricing. However, market fundamentals remain strong, and we expect rate increases to continue their moderating trend. We will continue to help clients find competitive pricing and coverage, as well as meaningful insights into how the quickly changing market dynamics may impact their risks.”