Global commercial insurance prices increased 3% in the third quarter of 2023, the same as the prior quarter, according to the Global Insurance Market Index released by the insurance broker Marsh, a business of Marsh McLennan.
The third quarter marks the 24th consecutive quarter of pricing increases, continuing the longest run of increases since the inception of the index in 2012, said Marsh, noting that increases peaked at 22% in the fourth quarter of 2020.
Average pricing continued to be relatively consistent across almost all regions during Q3, which, similar to Q2, was driven largely by a continuation of the trend for rate decreases in financial and professional lines and a small decrease for prices in the cyber insurance market, Marsh explained.
This was offset by property insurance increases, most notably in the US where property prices rose on average by 14%, Marsh said.
Composite pricing regionally ranged from a decrease of 1% in the UK and in Canada, to an increase of 10% in the Latin America and Caribbean region. Property insurance experienced increases in every region, while cyber and financial and professional lines pricing generally decreased or showed moderating increases, Marsh said.
In the US, composite prices rose overall by 4% on average, the same as the previous two quarters. In Latin America and the Caribbean, pricing increased by 10% (up from 8% in Q2), in Europe by 4% (down from 5% in Q2), by 1% in Pacific (down from 2%) and was flat in Asia (the same as in Q2). In the UK, composite pricing decreased by 1% (compared to a 1% increase in Q2).
For the first time, the Marsh Global Insurance Market Index is separately reporting results for Canada (where prices in Q3 decreased by 1%), and India, Middle East & Africa, which recorded an increase of 3%. Previously, these results were included in aggregate data, but not broken out.
Globally, average pricing for the four major product lines in Q3 was as follows:
- Property insurance: +7% (+10% in Q2 2023)
- Casualty insurance: +3% (+3% in Q2 2023)
- Financial and professional lines insurance: -6% (-8% in Q2)
- Cyber insurance: -2% (+1% in Q2).
Other findings included:
- Cyber insurance pricing continued to decrease in the US, declining 6% in the quarter, compared to a 4%
decrease in the prior quarter. - For the fifth consecutive quarter, overall average pricing for financial and professional lines fell, driven by rate reductions and additional capacity – particularly in the UK.
- Q3 was the first quarter to record an average decrease in cyber prices since the second half of 2018.
- Insurers in most regions remain concerned about the impact of inflation on asset values and claims costs during renewal discussions.
- Ransomware claims continued to rise in many regions.
“After years of increases, even a modest reduction in cyber rates will be welcomed by clients and in large part is recognition of the hard work they have done to improve their cyber resilience,” commented Pat Donnelly, president, Marsh Specialty and Global Placement, in a statement accompanying the report.
“However, the property market – and property catastrophe in particular – remains challenging and is an area of focus of our work with clients,” he added.
Source: Marsh
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