Global Insurance Prices Increased for 17th Straight Quarter in Q4

Global insurance prices increased 13 percent in the 4th quarter of 2021, the 17th consecutive quarter of price increases, according to the "Global Insurance Market Index" from Marsh.

Though insurance prices continued to increase during the final 3 months of last year, a trend of moderating rate increases that began during the 1st quarter of 2021 continued as well, Marsh said, with the moderation evident across many lines of business and in most geographies.

In most regions, the moderation in price increases resulted from a slower rate of increase in property insurance and in directors and officers liability, according to Marsh.

The United Kingdom, with a composite 4th quarter pricing increase of 22 percent (down from 27 percent in the prior quarter), the United States, where price increases stayed steady from the 3rd quarter at 14 percent, and the Pacific Region, with a 13 percent increase, down from 17 percent in the 3rd quarter, continued to drive the global composite rate, according to the report.

The 4th quarter rate increase was 4 percent in Asia, down from 6 percent in the 3rd quarter, and 9 percent in Continental Europe, down from 10 percent the prior quarter, Marsh reported. The lone exception to the trend of moderating increases was Latin America and the Caribbean, where rates increased 4 percent in the 4th quarter, up from 2 percent in the 3rd quarter.

The Marsh survey also found that global property insurance prices were up 8 percent on average in the 4th quarter, down from a 9 percent increase in the 3rd quarter of 2021. Casualty insurance prices were up 5 percent on average, down from a 6 percent increase the previous 2 quarters.

Cyber insurance drove 4th quarter price increases in financial and professional lines, which saw the highest rate of increase among major insurance product categories at 31 percent, down slightly from 32 percent the prior quarter, Marsh said.

Continuing cyber-insurance rate increases were driven largely by the continued increase in the frequency and severity of ransomware claims, with many insurers looking to tighten terms and conditions, Marsh said. Cyber-insurance prices increased 130 percent in the United States during the 4th quarter, up from 96 percent in the 3rd quarter, and 92 percent in the United Kingdom in the 4th quarter, up from 73 percent in the 3rd quarter.

"We are operating in a challenging risk and insurance market and will continue to focus on developing solutions in classes such as cyber, which will continue to be difficult for both clients and insurers," Lucy Clarke, president, Marsh Specialty and Marsh Global Placement, said in a statement. "More broadly, however, we expect continued moderation in rate increases through 2022, a trend which will be welcomed by our clients."