Commercial Insurance Prices Increased 15 Percent in Third Quarter

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

The third-quarter increase was the same rate of increase as that recorded during this year's second quarter, Marsh said.

Marsh noted that while the third-quarter increase represented the sixteenth consecutive quarter of insurance price increases, the rate of increase continues to moderate in many lines of business and in most regions of the world. That might suggest that commercial insurance price increases peaked in the fourth quarter of 2020 at 22 percent, the broker and risk adviser said.

Price increases in most regions moderated due to a slower rate of price increases in property insurance and directors and officers liability insurance, Marsh said. The United Kingdom, with a composite pricing increase of 27 percent (down from 28 percent the previous quarter), and the Pacific region, with a 17 percent increase (down from 23 percent in this year's second quarter), continued to drive the global composite rate, according to Marsh.

The rate of increase in Asia was 6 percent, steady from the previous quarter; 2 percent in Latin America and the Caribbean, down from 13 percent in the second quarter; and 10 percent in Continental Europe, up from 12 percent during the prior 3-month period. In the United States, rates increased by 14 percent, up from 12 percent during the second quarter, driven by substantial increases in cyber-insurance rates and a moderate increase in property and casualty rates, Marsh said.

Marsh noted several other key findings from its latest index.

• Global property insurance pricing was up 9 percent on average, down from a 12 percent increase in the first quarter of 2021. Casualty pricing was up 6 percent on average, the same increase as in the previous two quarters.
• Pricing in financial and professional lines again had the highest rate of increase across the major insurance product categories, at 32 percent compared to 34 percent in the previous quarter.
• Cyber-insurance pricing continued to diverge from the trend toward moderation in price increases. In the United States, cyber-insurance prices increased 96 percent, up from 56 percent in the second quarter. In the United Kingdom, cyber-insurance prices increased 73 percent, up from 35 percent in the second quarter. The increases were driven by the frequency and severity of ransomware claims, Marsh said.

"While the risk and insurance landscape remains challenging around the world, we expect rates to continue to moderate in most lines," Lucy Clarke, president of Marsh Specialty and Marsh Global Placement, said in a statement. "However, the pressure on rates in cyber insurance is likely to continue."