According to Marsh’s Global Insurance Market Index, global commercial insurance prices increased 6% in the third quarter of 2022 (down from 9% in Q2), continuing a trend of moderating increases that began in Q1 2021.
While this is the 20th consecutive quarter of increases, pricing has moderated in most regions, owing to the first decrease in financial and professional lines since the third quarter of 2017.
“The global business environment remains difficult for clients,” said Lucy Clarke, president of Marsh Specialty and Global Placement. Inflation and geopolitical instability continue to affect all sectors, and we anticipate even more difficult conditions in the already stressed property catastrophe market following Hurricane Ian.
“We are collaborating closely with our clients to achieve the best possible market outcomes while also exploring the full range of options available to assess and address their risks, including alternative and captive solutions.”
D&O pricing is becoming more reasonable.
The overall decrease in certain financial and professional lines, most notably directors and officers insurance, moderated pricing increases across most regions. The United States experienced the greatest moderation in average price increases, with a 5% composite price increase (down from 10% in Q2 2022).
Rates increased by 7% in the UK (down from 11%), 5% in the Pacific (down from 7%), and 2% in Asia (down from 3%). Prices in Latin America and the Caribbean increased by 5% (the same as in Q2), while prices in Continental Europe increased by 6%. (the same as the previous two quarters).
Among the survey’s other findings were:
- Global property insurance pricing increased by 6% on average in the third quarter of 2022, matching the previous quarter’s increase; casualty pricing increased by 4% on average, compared to 6% in the previous quarter.
- Cyber insurance pricing increased 53% globally in Q3. The rate of increase in the largest cyber insurance markets continued to moderate, with prices rising by 48% in the US and 66% in the UK, compared to 79% and 68%, respectively, in the previous quarter.
- Because of the exclusion of cyber, overall pricing in financial and professional lines fell by 1% in Q3, compared to a 16% increase in Q2 (which included cyber). This quarter’s result was driven by declines in the United States, the United Kingdom, and Australia, as well as slower growth rates elsewhere.
- Concerns about inflation keep valuation at the forefront of insurers’ minds at renewal.