Global commercial insurance prices increased 9% in the second quarter of 2022 (down from an 11% increase in Q1), continuing a trend of moderating rate increases that began in Q1 2021, according to the Global Insurance Market Index released by insurance broker Marsh.
Average price hikes across most regions moderated due to slower rates of increase, and some decreases, in certain financial and professional lines, Marsh said.
Cyber insurance pricing continued to rise significantly, although the pace of increase slowed in the quarter, to 79% in the U.S. and 68% in the UK, compared to 110% and 102%, respectively, in the prior quarter.
The UK, with a composite pricing increase of 11% (down from 20% in Q1 of 2022), experienced the largest decline in average price increases.
In the U.S., prices increased by 10% (down from 12% in Q1 2022), in Pacific by 7% (down from 10%), in Latin America and the Caribbean by 5% (down from 6%), in Asia by 3%, and by 6% in Continental Europe (both the same as the previous quarter).
Among other findings, the Marsh survey noted:
- Global property insurance pricing was up 6% on average in the second quarter of 2022, down from a 7% increase in Q1 2022.
- Casualty pricing was up 6% on average, compared to 4% in the previous quarter.
- Overall pricing in financial and professional lines, driven by cyber, again had the highest rate of increase across the major insurance product categories, at 16%. However, this was down from 26% in the previous quarter.
- Rates for directors and officers insurance declined in the U.S., UK and Pacific.
- The adequacy of valuations for insured or replacement values has become a focal point for insurers, driven by concerns about inflation, supply chains, and labor shortages, as well as claims inflation in cases where adjusted loss amounts exceed reported values.
- In the U.S., clients with significant losses or exposure to secondary catastrophe perils – including wildfire, convective storm, and pluvial flood – typically experienced above average increases.
“At a time of global business uncertainty, driven by the ongoing war in Ukraine, supply chain disruption, and rising inflation, trading conditions remain tough for many clients. We are also seeing the impact of rising inflation on insured values and exposure growth, which has the potential to impact pricing and insurer appetite,” commented Lucy Clarke, president, Marsh Specialty and Global Placement, Marsh, in a statement.
Source: Marsh
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Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.