New data from broker Marsh shows that global commercial insurance prices increased by 22% in the fourth quarter of 2020.
The increase was the largest recorded since Marsh first released its Global Insurance Market Index in 2012, and follows year-on-year average increases of 20% in the third quarter of 2020 and 19% in the second quarter.
But the index also showed that price increases may be starting to plateau for some lines of insurance in certain geographies.
For example, property insurance and directors and officers (D&O) insurance pricing in the US shows signs of moderating increases, and similar trends can be seen in certain property and casualty lines in Continental Europe and Latin America and Caribbean (LAC).
Regionally, Marsh found that Continental Europe, Asia, and LAC have now experienced moderate levels of price increases for three quarters.
The average composite price increase in the fourth quarter was driven principally by property insurance rates and financial and professional lines.
Other findings showed that global property insurance pricing was up 20% on average, slightly down from the 21% increase experienced in the third quarter.
However, global financial and professional lines were up 47% on average, up from a 40% increase the previous quarter. Casualty pricing was up 7% on average, compared to a 6% increase in the prior quarter.
Additionally, composite pricing in the fourth quarter increased in all geographic regions for the ninth consecutive quarter.
And all regions, except LAC (9%), reported double-digit price increases, led by the UK (44%), Pacific (35%), and the US (17%).
Public company D&O coverages also continued to see large increases, especially in major markets such as the UK and Australia.
“The global insurance marketplace was very challenging in 2020, and we expect these conditions to persist through the first half of 2021,” said Lucy Clarke, President, Marsh JLT Specialty and Marsh Global Placement.
“Although we are seeing signs that price increases are beginning to plateau in some lines, our clients continue to face tough trading conditions. We are committed to presenting all risk mitigation and insurance placement options to our clients and to offer advice and support as they consider adjusting their insurance buying patterns.”