Cyber rate increases continue to moderate; property coverage remains challenging globally
Global commercial insurance prices increased 3% in the second quarter of 2023 (down from a 4% increase in Q1), according to the Global Insurance Market Index released by Marsh.
The second quarter marks the 23rd consecutive quarter of pricing increases.
Pricing was relatively consistent across all regions in Q2. This was driven largely by rate decreases for financial and professional lines and continued moderation in the cyber insurance market, which was offset by property insurance increases, the largest of any major product line this quarter. In the UK, composite pricing increased by 1% (down from a 3% increase in Q1 of 2023), in Pacific by 2% (down from 7% in Q1), and was flat in Asia (down from 1% in Q1). The remaining regions recorded identical increases on the previous quarter; in Latin America and the Caribbean pricing increased by 8% (8% in Q1), in Continental Europe by 5% (5% in Q1), and in the US by 4% (4% Q1).
Among other findings, the survey noted:
- Global property insurance pricing was up 10%, on average, in the second quarter of 2023, the same as in the previous quarter; casualty insurance pricing increased 3%, also the same as in Q1.
- For the fourth consecutive quarter, overall average pricing for financial and professional lines fell. Driven by rate reductions and additional capacity – particularly in the UK – average pricing decreased by 8% in the second quarter, compared to a decline of 5% in Q1,
- Globally, cyber insurance pricing increases moderated to 1%, compared to 11% in the prior quarter and 28% in Q4 2022. This was driven by significant moderation in the US, with average price decreases of 4%, compared to 11% increases in Q1.
- Concerns about the impact of inflation on asset values and claims costs remained a key focus for insurers at renewal in most regions.
Commenting on the report, Pat Donnelly, President, Marsh Specialty and Global Placement, Marsh, said: “While the continued moderation in cyber and D&O insurance is a highly positive development for our clients, the continued increases in the property market, specifically property catastrophe, remain an area of concern for our clients, and of focus for us.
“As we move through the second half of 2023, we are working with clients to explore a broad range of options that will help them navigate the challenges ahead amid ongoing economic, inflationary, and geopolitical uncertainty, and achieve optimal outcomes from the insurance market.”