Commercial Insurance Price Increases Moderate during Second Quarter

Global commercial insurance prices increased 15 percent during the second quarter of 2021, according to the "Global Insurance Market Index" from Marsh.

While premium hikes continued to moderate during the quarter, it was the 15th consecutive quarter of rate increases in the global commercial insurance market, Marsh said. It was also the third consecutive quarter that saw a fall in the average rate of premium increase, and follows year-on-year increases of 18 percent in the first quarter and 22 percent in the fourth quarter of 2020.

Price increases moderated across all geographies due to generally slower rate increases in property insurance, except in Europe, and in financial and professional lines, except in Asia and Latin America and the Caribbean.

The United Kingdom, with a composite pricing increase of 28 percent (down from 35 percent during the first quarter), and the Pacific region, with a 23 percent increase (down from 29 percent during the first three months of 2021), continued to drive the global composite rate, Marsh reported.

The rate of increase in the United States was 12 percent (down from 14 percent during the first quarter), in Asia it was 6 percent (down from the first quarter's 8 percent), and in Continental Europe it was 13 percent (down from 15 percent in the first quarter).

The Marsh survey found cyber insurance pricing running counter to the broader moderation trend. In the United States, cyber insurance prices increased 56 percent during the second quarter, compared to 35 percent during the first 3 months of 2021. In the United Kingdom, cyber prices increased 35 percent during the second quarter, up from 29 percent during the first quarter. Marsh said the increases were driven by the frequency and severity of ransomware claims.

Global property insurance pricing increased 12 percent on average during the second quarter, down from a 15 percent increase during the first quarter, Marsh said. Meanwhile, average second-quarter casualty price increases came in at 6 percent, the same as the prior quarter.

Pricing in financial and professional lines again had the highest rate of increase across major insurance product categories rising 34 percent in the second quarter, compared to 40 percent during the first quarter, according to the Marsh report.

The Marsh index is a proprietary measure of global commercial insurance premium price changes at renewal. It represents the world's major insurance markets and reflects nearly 90 percent of Marsh's premium.