Average global commercial insurance prices increased more in the second quarter of 2020 than they have for eight years, new data from Marsh has revealed.
The insurance company's figures show that average prices jumped by 19% between April and June, which is the largest spike recorded since 2012.
The increase follows year-on-year price rises of 14% in the first quarter, and 11% in the final three months of 2019.
Marsh said that rising prices have been driven principally by increases in property insurance rates and financial and professional lines, along with pressures brought on by COVID-19.
“While pricing movements this quarter were impacted by losses related to COVID-19, other large losses contributed to overall pricing pressures,” said Dean Klisura, president of global placement and advisory at Marsh.
“As insurers continue to work through claims in property and directors and officers (D&O), and with the full cost of COVID-19 still developing, upward pressure on pricing is anticipated for the balance of 2020.”
Marsh's figures also show that global property insurance prices were up 19% in the last quarter, with financial and professional lines up 37%, and global casualty pricing up 7% on average.
Composite pricing in the second quarter increased in all geographic regions for the seventh consecutive quarter.
The US, UK, Continental Europe, and Pacific regions all had double-digit pricing increases of 18%, 31%, 15% and 31% respectively, mainly driven by increases in D&O coverages.
Certain D&O markets saw large increases. For example, US public company D&O prices were up 59% on average, with more than 90% of clients experiencing an increase.
In the UK, D&O pricing increases averaged over 100%. “And a similar situation exists in Australia, where a lack of competition has resulted in capacity shortage,” Marsh added.
Author: Chris Seekings
Image credit: iStock
