Following over four years of consecutive quarterly declines, global commercial insurance prices increased, on average, during the first-quarter of 2018, according to broker Marsh’s Global Insurance Market Index.
The majority of regions showed either moderate increase in average prices during Q1, or a slowdown in the pace of declines, driven largely by increases in property lines as a result of 2017 catastrophe events, and also increases in financial and professional (FinPro) lines.
The sole exception was Asia, which saw prices decline more in Q1 2018 than in the fourth-quarter of 2017, says Marsh.
Although down from the 3.2% average increase in Q4 2017, global property lines increased by 2.7% in the first-quarter of this year, as 2017 catastrophe events continue to impact pricing, although Marsh says that this varies by geography and risk.
Global casualty lines actually declined further, on average, in the first-quarter when compared with Q4 2017, at -1.7%, which is a continuation of the trend of year-on-year declines that goes back five years.
Global financial and professional lines’ rate increases accelerated in the first-quarter, on average, increasing by 1.8% when compared with just a 0.1% increase in the fourth-quarter of 2017.
By region, commercial insurance rates in the U.S. declined by an average of -0.5% in Q1 2018, which is a very slight improvement on the -0.6% decline witnessed in Q4 2017. Marsh also comments on U.S. cyber insurance pricing, noting that during Q1 2018 prices declined by an average of -1.7%.
In the UK, Marsh’s composite index reveals that, on average, commercial insurance rates increased by 0.2%, which makes it the second consecutive quarter of overall average increases in the region.
This was also the case in Latin America, which witnessed average commercial insurance rate increases of 0.8% in Q1 2018 after a 3% average increase in Q4 2017.
In Australia, on average, rates increased by a huge 11.6% overall, making it the fifth consecutive quarter of average rate increases in the region.
While in Continental Europe, rates declined on average by -0.8%, which is an improvement on the -1.1% average decline witnessed in Q4 2017.
Competition in the global insurance market remains intense, and although 2017’s catastrophe experience is driving some price increases in the property segment, challenges still remain here and in other lines of business, such as casualty and cyber.
It will be interesting to see how the industry performs over the next couple of quarters, and if global commercial insurance rates can maintain their positive trend in light of intense competition and other market headwinds.