Global commercial insurance prices increased for the 18th consecutive quarter over the first three months of this year amid growing inflationary pressures.
That is according to Marsh's latest Global Insurance Market Index, which shows that prices rose by 11% in first quarter of 2022. However, this also signifies a trend of moderating price increases that began in the first three months of 2021.
The UK recorded a composite pricing increase of 20%, down from a 22% rise in final quarter of last year, while US prices increased by 12%, down from 14%. This moderating trend has been driven by a slower rate of increases in financial and professional lines.
In the Pacific region, the rate of increase in the latest quarter was 10%, down from 13%. Asia recorded an increase of 3%, down from 4%, and Continental Europe saw prices rise by 6%, down from 9%.
For the second consecutive quarter, the one exception to the moderating trend was in Latin America and the Caribbean, where rates increased by 6%, up from 4%.
Marsh said that increases in inflation are already impacting claims in several lines of business and have been flagged by insurers as a concern in affected geographies.
“The war in Ukraine, while most importantly a humanitarian tragedy, has added pressure to what is already a challenging insurance market for our clients,” explained Lucy Clarke, president at 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.”
The findings also show that global property insurance pricing was up 7% on average, down from an 8% increase. Casualty pricing was up 4% on average, down from 5% in the previous quarter.
Pricing in financial and professional lines, largely driven by cyber, had the highest rate of increase across the major insurance product categories, at 26%. However, this 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 largely by the continued increase in the frequency and severity of ransomware claims with many insurers seeking to tighten coverage terms and conditions, especially in relation to the conflict in Ukraine.
Prices increased by 110% in the US, down from 130% in final quarter of 2021, and by 102% in the UK, up from 92%.
Clarke added: “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.”
Image credit: iStock
Author: Chris Seekings