Global commercial insurance prices increased by 13% during the fourth quarter of 2021, although the rate of increase continues to slow in many industries and in most geographic areas, according to Marsh & # 39 ;s Global Insurance Market Index.
Marsh said that price increases. in most regions slowed down due to a slower rate of increase in property insurance and the responsibilities of board and civil servants. The largest increases were seen in the United Kingdom (22%), the United States (14%) and the Pacific (13%). Continental Europe saw 9% increases and Asia only 4%.
In all regions, the market remained challenging for risks with poor loss history or large disaster exposure, while loss-free risks could access capacity and saw smaller interest rate increases. Conditions continued to tighten in many classes globally.
Global property insurance pricing rose by an average of 8% during the fourth quarter, down from a 9% increase in the third quarter of 2021, while accident pricing increased by 5% on average. , a decrease from 6% during the two previous quarters. Pricing in financial and professional lines, driven by cyber, once again had the highest growth rate in the major insurance product categories, at 31%, compared to 32% in the previous quarter, Marsh said.
The frequency and severity of ransomware claims continued to drive interest rate hikes for cyber insurance, with many insurance companies trying to tighten coverage conditions, Marsh said, adding that prices rose by 130% in the US and 92% in the UK
Lucy Clarke, president, Marsh Specialty and Marsh Global Placement, said: "We are working on a challenging risk and insurance market and will continue to focus on developing solutions in classes such as cyber, which will continue to be difficult for both customers and insurance companies. to be welcomed by our customers. ”
Phase prices insurance increased by 7% during the fourth quarter, compared with 10% during the previous quarter. Marsh said customers with poor risk quality, meaningful losses or significant exposure to secondary disaster risks – including forest fires, convective storms and floods – generally experienced above-average increases. Customers without losses, good risk quality and in sought-after industries could gain access to overcapacity.
Pricing for accident insurance in the United States increased by 4%, a decrease from 7% during the third quarter. Excluding occupational injury compensation, the increase was 7%. Marsh noted that pricing for general responsibility continued to be affected by jury decisions and social inflation.
One area that saw the price increase compared to the previous quarter was pricing for financial and professional lines (34% compared to 27% during the third quarter). Pricing for D&O liability insurance for listed companies increased by 6%, lower than 10% during the previous quarter. Marsh said this was affected by new capacity, which increased competition in the medium-to-high surplus strata, and many customers increased their D&O limits. rose 10%. Marsh said competition for new business increased among European domestic airlines, while insurance companies continued to exercise strict insurance control, especially for large, complex multinational customers. Pricing for accident insurance increased by 7%, up from 5% in the previous quarter. Loss-affected renewals were the most challenging, with insurance companies wanting to limit capacity.
Pricing for financial and professional lines increased by 13%, a decrease from 14% during the third quarter. Marsh said the D&O market continued to be stable due to increased insurance company competition, appetite and capacity. But in general, insurers demanded more information on renewal, while self-retention increased, as did the use of captives.
Pricing for property insurance in the UK increased by 10%, driven by loss-making activity in 2021, as well as rising reinsurance contracts. costs. Pricing for accident insurance in the UK increased by 4%. The rate of increase for D&O was 24% in the fourth quarter, compared to 61% in the third quarter, mainly due to increased capacity.
Latin America and Caribbean pricing
Property insurance prices increased by 7%, up from 2% in the previous quarter. Brazil and Colombia saw no change in the rate of price increase, while the rest of the region increased (5% -10%). Pricing for accident insurance fell by 3%, largely due to local capacity and competition.
Marsh noted that large, complex programs continued to experience small increases across the region, especially when there was a need for optional capacity. Pricing for financial and professional industries rose by 12%, down from 17% in the third quarter, while cyber prices rose by 40%.
Prices for property insurance rose by 3%, from 5% in the third quarter. Marsh said that elements of insurance company competition continued to return, focusing on loss-free customers in low-risk industries, but added that the market remained challenging for customers in cat zones, high-risk industries and those with poor loss histories.
Pricing for accident insurance increased by 2%, although capacity continued to be plentiful. But Marsh added that multinational insurance companies were limiting the capacity of surplus inventory, especially with product recalls and product liability exposures. Pricing for financial and professional lines increased by 17%, with D&O accounting for a significant part of the price increases, while cyber remained the most challenging coverage area.
Prices for property insurance increased by 8%, and at the same time as insurance capacity increased for quality, loss-free customers, challenges remained for high-risk industries, risks in cat zones and customers with poor loss history, Marsh said. reduced capacity from some major airlines. The risk selection was more pronounced than before. Pricing for financial and professional lines increased by 18%, a decrease from 25% during the third quarter, and pricing in D&O programs continued to level off, the broker said.