Global commercial insurance prices increased by 15% in the third quarter of 2021, according to the latest Global Insurance Market Index released by re/insurance broker Marsh.
It marks the 16th consecutive quarter of increases, but rates have continued to moderate in many lines of business and most geographies, suggesting that pricing may have reached a peak during the fourth quarter of 2020, at 22%.
The exception to this trend is the US, where rates increases moved from 12% to 14% between Q2 and Q3, and cyber lines, which saw much larger pricing increases than other lines due to the growing threat of ransomware.
In the US prices increased 96% in the US, up from 56% in Q2, and in the UK prices increased by 73%, up from 35% in Q2, driven by the frequency and severity of ransomware claims.
“While the risk and insurance landscape remains challenging around the world, we expect rates to continue to moderate in most lines,” said Lucy Clarke, President of Marsh Specialty and Marsh Global Placement.
“However, the pressure on rates in cyber insurance is likely to continue. Developing solutions for our clients in this segment remains a top priority for Marsh.”
Marsh noted that pricing increases across most regions moderated in Q3 due to a slower rate of increase in property insurance and directors’ and officers’ liability (D&O).
The UK, with a composite pricing increase of 27% (down from 28% in Q2 2021) and the Pacific region, with a 17% increase (down from 23% in Q2 2021) continued to drive the global composite rate.
The rate of increase in Asia was 6% (steady from the previous quarter), 2% in LAC (down from 4%), and 10% in Continental Europe (down from 13%).
The one exception was the US where rates increased by 14%, driven by substantial increases in cyber insurance rates and a moderate increase in property and casualty rates.
Overall, global property insurance pricing was up 9% on average, down from a 12% increase in the first quarter 2021, while casualty pricing was up 6% on average, which was the same as the previous two quarters.
Pricing in financial and professional lines again had the highest rate of increase across the major insurance product categories, at 32%, compared to 34% in the previous quarter.