Global commercial insurance pricing increased for the tenth consecutive quarter in the opening three months of 2020, while the impact of the ongoing COVID-19 pandemic on pricing dynamics proved to be insignificant, reports re/insurance broker Marsh.
In the first-quarter of 2020, global commercial insurance pricing rose 14% on the back of average rate increases of 11% in the final quarter of last year.
In fact, and as highlighted by Marsh’s Q1 2020 Global Insurance Market Index, global commercial insurance prices have, on average, now increased for ten consecutive quarters, with the last decline being seen in the third-quarter of 2017, of -2%.
The global insurance and reinsurance brokerage explains that during the first-quarter of the year, the COVID-19 pandemic had an “insignificant impact on pricing”, with the reported increase actually being the largest year-over-year increase in the Index since its inception in 2012.
However, Marsh notes that it does expect that the COVID-19 pandemic “will likely” have an impact on pricing for the balance of 2020.
By coverage line, and Marsh’s Q1 Index reveals that global property insurance pricing increased by 15%, global casualty by 5%, and global FinPro by 26%. This compares with price increases of 13%, 3%, and 18% in the previous quarter, respectively.
By region, composite pricing increased in all regions for the sixth quarter running, with the highest seen in the Pacific region, with an average increase of 23%. In Asia, pricing increased by an average of 6% in Q1 2020, as was the case in Latin America. In Continental Europe the average price change in the quarter was 8%, while in the UK and the U.S. pricing rose by 21% and 14%, respectively.
Dean Klisura, President, Global Placement and Advisory Services at Marsh, commented: “Pricing was trending higher in the first quarter, prior to any meaningful impact from losses associated with COVID-19. However, COVID-19 will likely have an impact on pricing for the balance of 2020.”
