Commercial insurance pricing up 11% in first quarter of 2022; cyber rates continue steep rise; inflation a concern for insurers
New York, NY (Apr. 27, 2022) – Global commercial insurance prices increased 11% in the first quarter of 2022, according to the Global Insurance Market Index released by Marsh, the world’s leading insurance broker and risk advisor, continuing a trend of moderating rate increases that began in Q1 2021. While this is the 18th consecutive quarter of increases, the rate of increase continues to moderate across most lines of business and in almost all geographies.
Pricing increases across most regions moderated due to a slower rate of increase in financial and professional lines. The UK, with a composite pricing increase of 20% (down from 22% in Q4 of 2021), and the US, where prices increased 12% (down from 14%) continued to drive the global composite rate. The rate of increase in Pacific was 10% (down from 13%), in Asia 3% (down from 4%) and 6% in Continental Europe (down from 9%). For the second consecutive quarter, the one exception to the moderating trend was Latin America and the Caribbean where rates increased by 6% (up from 4% the previous quarter).
Among other findings, the survey noted:
- Global property insurance pricing was up 7% on average, down from an 8% increase, in the first quarter of 2022; casualty pricing was up 4% on average, down from 5% in the previous quarter.
- Pricing in financial and professional lines, largely driven by cyber, again 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 110% in the US (down from 130% in Q4 2021), and 102% in the UK (up from 92%).
- Increases in inflation are already impacting claims in several lines of business and have been flagged by insurers as a concern in affected geographies.
Commenting on the report, Lucy Clarke, President, Marsh Specialty and Marsh Global Placement, said: “The war in Ukraine, while most importantly a humanitarian tragedy, has added pressure to what is already a challenging insurance market for our clients. 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.
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.”
Marsh is the world’s leading insurance broker and risk adviser. With approximately 45,000 colleagues operating in more than 130 countries, Marsh serves commercial and individual clients with data-driven risk solutions and advisory services. Marsh is a business of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With annual revenue of nearly US$20 billion, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses: Marsh, Guy Carpenter, Mercer, and Oliver Wyman. For more information, visit MMC.com.
SOURCE: MarshTags: Marsh