Cyber rates continue rise, though at slower pace
Global commercial insurance prices increased 9% in the second quarter of 2022 (down from an 11% increase in Q1), according to the Global Insurance Market Index released by Marsh, continuing a trend of moderating rate increases that began in Q1 2021. While this is the 19th consecutive quarter of increases, the rate of increase continued to moderate across most lines of business and in almost all geographies.
Pricing increases across most regions moderated due to slower rates of increase, and some decreases, in certain financial and professional lines. The UK, with a composite pricing increase of 11% (down from 20% in Q1 of 2022), experienced the largest decline in average price increases. In the US, prices increased by 10% (down from 12%), in Pacific by 7% (down from 10%), in Latin America and the Caribbean by 5% (down from 6%), in Asia by 3%, and by 6% in Continental Europe (both the same as the previous quarter).
Among other findings, the survey noted:
- Global property insurance pricing was up 6% on average in the second quarter of 2022, down from a 7% increase in the previous quarter; casualty pricing was up 6% on average, compared to 4% in the previous quarter.
- Overall pricing in financial and professional lines, driven by cyber, again had the highest rate of increase across the major insurance product categories, at 16%. However, this was down from 26% in the previous quarter.
- Rates for directors’ and officers’ insurance declined in the US, UK and Pacific.
- Cyber insurance pricing continued to rise significantly, although the pace of increase slowed in the quarter, to 79% in the US and 68% in the UK, compared to 110% and 102%, respectively, in the prior quarter.
- Valuation has become a focal point for insurers, driven by concerns about inflation, supply chains, and labour shortages, as well as claims inflation in cases where adjusted loss amounts exceed reported values.
Commenting on the report, Lucy Clarke, President, Marsh Specialty and Global Placement, Marsh said: “At a time of global business uncertainty, driven by the ongoing war in Ukraine, supply chain disruption, and rising inflation, trading conditions remain tough for many clients. We are also seeing the impact of rising inflation on insured values and exposure growth, which has the potential to impact pricing and insurer appetite.
“We continue to work with our clients to find the most competitive pricing and coverage to meet their needs in this volatile environment.”