Global commercial insurance prices increased by almost a quarter in the final three months of last year, which was the largest rise recorded by insurance company Marsh since 2012.
The firm's analysis shows that prices rose by 22% in the final quarter of 2020, up from year-on-year increases of 20% in the third quarter, and 19% in the second quarter.
The average composite price increase in the fourth quarter was driven principally by global property insurance, which was up 20%, and financial and professional lines ,which were up 47%.
However, the findings also show that price increases may be starting to plateau for some lines of insurance in certain geographies.
Property insurance and directors and officers (D&O) insurance pricing in the US shows signs of moderating increases, and similar trends can be seen in certain property and casualty lines in Continental Europe and Latin America and Caribbean (LAC).
“The global insurance marketplace was very challenging in 2020, and we expect these conditions to persist through the first half of 2021,” said Lucy Clarke, president at Marsh JLT Specialty and Marsh Global Placement.
“Although we are seeing signs that price increases are beginning to plateau in some lines, our clients continue to face tough trading conditions.”
Composite pricing in the fourth quarter increased in all geographic regions for the ninth consecutive quarter, according to the analysis.
All regions, except LAC, reported double-digit price increases, led by the UK, Pacific, and the US, on 44%, 35% and 17% respectively.
Public company D&O coverages continued to see large increases, especially in major markets such as the UK and Australia. Although D&O price increases may be moderating in other regions, prices are still up by between 25% and 50% in many countries.
“We are committed to presenting all risk mitigation and insurance placement options to our clients and to offer advice and support as they consider adjusting their insurance buying patterns,” Clarke added.
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Author: Chris Seekings