In the latest Marsh Global insurance market index report for Europe, property insurance pricing saw a 7% increase, slightly down from the prior quarter’s 8%.
The rise was attributed to the impact of catastrophic events and secondary perils like floods, storms, wildfires, and hail.
Insurers adjusted their exposures, line sizes, and increased pricing for CAT risks in response to higher retentions, reinsurance costs, and ongoing loss activity.
Casualty insurance, on the other hand, experienced a 5% increase, marking the seventeenth consecutive quarter of growth.
While some smaller companies witnessed rate reductions, US exposure remained a crucial factor influencing insurers’ risk appetite.
They exercised caution when dealing with heavily exposed risks, seeking additional information and internal referrals. Long-term agreements, typically lasting two years, were offered to clients.
In the financial and professional lines sector, pricing declined by 4%, a slight improvement from the prior quarter’s 2% drop. Capacity increased, driven by both new market entrants and existing insurers deploying more resources for their clients.
Some clients used premium savings to bolster coverage limits. There was also room for policy innovations and wording improvements, particularly in areas related to Directors and Officers (D&O) and Environmental, Social, and Governance (ESG) exposure.
Notably, cyber insurance pricing remained flat, bucking the trend of a 3% increase in the prior quarter. Approximately 40% of clients received rate reductions at renewal, with more significant reductions seen on excess layers.
Large organisations primarily benefited from savings at the bottom program layers. Capacity increase was substantial, and policy wording typically improved.
Moreover, ransomware coverage exclusions were often removed at renewal due to improved underlying risk quality and greater flexibility from insurers.
