Global commercial insurance prices increased 3% in the third quarter of 2023, the same as the prior quarter, according to the Global Insurance Market Index released today by Marsh, the world’s leading insurance broker and risk advisor and a business of Marsh McLennan. The third quarter marks the 24th consecutive quarter of pricing increases.
Pricing continued to be relatively consistent across almost all regions in Q3. As with Q2, this was driven largely by a continuation of the trend for rate decreases in financial and professional lines and a small decrease for prices in the cyber insurance market. This was offset by property insurance increases, most notably in the US where property prices rose on average by 14%.
In the US, prices rose overall by 4% on average, the same as the previous two quarters. In Latin America and the Caribbean pricing increased by 10% (up from 8% in Q2), increased in Europe by 4% (down from 5% in Q2), increased by 1% in Pacific (down from 2%) and were flat in Asia (the same as in Q2). In the UK, composite pricing decreased by 1% (compared to a 1% increase in Q2). For the first time, the Global Insurance Market Index is separately reporting results for Canada, where prices in Q3 decreased by 1%, and India, Middle East & Africa, which recorded an increase of 3%.
Other findings included:
- Global property insurance pricing was up 7%, on average, in the third quarter of 2023, a fall from an increase of 10% in the previous quarter; casualty insurance pricing increased 3%, the same as the previous three quarters.
- For the fifth consecutive quarter, overall average pricing for financial and professional lines fell. Driven by rate reductions and additional capacity – particularly in the UK – average pricing decreased by 6% in the third quarter, compared to a decline of 8% in Q2.
- Globally, cyber insurance pricing decreased by 2%, compared to a 1% increase in the prior quarter. This is the first quarter to record an average decrease since the second half of 2018.
- Insurers in most regions remain concerned about the impact of inflation on asset values and claims costs during renewal discussions.
Commenting on the report, Pat Donnelly, President, Marsh Specialty and Global Placement, Marsh, said: “After years of increases, even a modest reduction in cyber rates will be welcomed by clients and in large part is recognition of the hard work they have done to improve their cyber resilience. However, the property market – and property catastrophe in particular – remains challenging and is an area of focus of our work with clients.
“In an uncertain geopolitical and economic environment, we are exploring a wide range of risk mitigation options with clients that can help them to manage the broad range of risks they face, build greater organizational resilience, and gain positive outcomes from insurers at renewal.”