Global commercial insurance rates rose 9% in the second quarter of 2022, according to a report Monday from Marsh LLC.
However, the pace of interest rate increases slowed for the sixth quarter in a row. Global compound increases peaked at 22% in the fourth quarter of 2020, the data showed.
The second quarter of 2022 was the 19th consecutive rise in the composite pricing, the longest rise since the index’s inception in 2012.
Cyber insurance pricing continued to rise significantly, although the rate of increase slowed during the quarter, to 79% in the US and 68% in the UK, compared to 110% and 102% respectively in the previous quarter. A slower rate of increase in financial and professional lines contributed to a moderation in pricing in most geographies in the second quarter of 2022.
Regionally, the UK saw the largest compound price increases for the second quarter at 11%, followed by the US at 10%; Pacific at 7%; Continental Europe at 6%; Latin America and the Caribbean at 5%; and Asia at 3%.
Among the lines, pricing in financial and professional lines had the highest price increase for the major insurance products globally, at 16%, primarily driven by cyber. In the US, for example, excluding the impact of cyber, pricing for financial and professional lines declined by low single digits in the second quarter.
Both property and casualty insurance rose an average of 6%, the report showed.
Although property insurance prices rose just 6% in the second quarter, continuing a slowdown in the rate of growth in recent quarters, “rate increases could accelerate in coming quarters, driven by challenging conditions in the reinsurance market and reduced capacity,” Marsh said.
In the real estate industry, valuation has become a focal point for property insurance companies, driven by concerns about inflation, supply chains and labor shortages, as well as claims experience in cases where adjusted claim amounts were well above reported values.
Casualty insurance pricing rose 6%, but excess pricing rose 16%, compared with 10% in the first quarter, as insurers continued to see loss trends as the effects of court closures in the earlier stages of the pandemic subside.
“At a time of global business uncertainty, driven by the ongoing war in Ukraine, supply chain disruptions and rising inflation, trading conditions remain difficult for many customers. We are also seeing the impact of rising inflation on policy values and exposure growth, which has the potential to impact pricing and insurers’ appetite, said Lucy Clarke, president of Marsh specialty and global placement, in a statement accompanying the report.