Global commercial insurance prices increased by 15% in the third quarter of 2021, driven by substantial growth in cyber insurance rates, research by Marsh has found.
While this is the 16th consecutive quarter of increases, the rate of growth continues to moderate in many lines of business and in most geographies, according to Marsh's latest Global Insurance Market Index.
Property insurance pricing was up 9% on average in the third quarter, down from a 12% increase in the first quarter 2021, while casualty pricing was up 6%, which was the same as in the previous two quarters.
Pricing in financial and professional lines again had the highest rate of increase across the major insurance product categories, at 32%, compared to 34% in the previous quarter.
Cyber insurance pricing continued to diverge from the moderation trend, driven by increasingly frequent and severe ransomware claims. In the US, prices increased by 96%, up from 56% in the second quarter, and by 73% in the UK, up from 35% in the previous three months.
Overall, Marsh said that the latest trends suggest that pricing increases may have peaked in the fourth quarter of 2020, at 22%.
“While the risk and insurance landscape remains challenging around the world, we expect rates to continue to moderate in most lines,” said Lucy Clarke, president at Marsh Specialty and Marsh Global Placement. “However, the pressure on rates in cyber insurance is likely to continue.”
Pricing increases across most regions moderated due to a slower rate of increase in property insurance and directors’ and officers’ liability.
The UK, with a composite pricing increase of 27%, down from 28% in the previous quarter, and the Pacific region, with a 17% increase, down from 23%, continued to drive the global composite rate.
The rate of increase in Asia was 6%, steady from the previous quarter, 2% in Latin America and the Caribbean, down from 4%, and 10% in Continental Europe, down from 13%.
The one exception was the US, where rates increased by 14%, up from 12% the previous quarter, driven by substantial increases in cyber insurance rates and a moderate increase in property and casualty rates.
Clarke said that developing solutions for Marsh's clients in the cyber insurance segment “remains a top priority”.
Image credit: iStock
Author: Chris Seekings