Insurance Prices Increased 20 Percent in 3rd Quarter: Marsh

Global commercial insurance prices increased 20 percent in the 3rd quarter of 2020, according to the Global Insurance Market Index compiled by Marsh.

Marsh said the increase was the largest since the index was launched in 2012, and it follows year-over-year average increases of 19 percent in the 2nd quarter and 14 percent in the 1st quarter.

Marsh said the 20 percent average composite price increase was driven primarily by property insurance rates and financial and professional lines.

The Marsh survey found that global property insurance prices were up 21 percent, and global financial and professional lines were up 40 percent on average, both greater than the increases reported in the 2nd quarter. Casualty pricing increased 6 percent on average, a slight drop from the 7 percent increase in the 2nd quarter.

Composite pricing in the 3rd quarter increased in all regions of the world for the 8th consecutive quarter, Marsh said. All regions except Latin America (9 percent) reported double-digit price increases. Increases were led by the United Kingdom, up 34 percent, the Pacific region, a 33 percent increase, and the United States, up 18 percent. Pricing changes in all regions were equal to or greater than those reported in the 2nd quarter.

Public company directors and officers (D&O) coverages continued to see large increases, more than 100 percent in the United Kingdom and Australia, and 60 percent in the United States. More than 90 percent of US public company D&O clients experienced an increase, Marsh said.

"Challenging conditions continue to exist across many parts of the insurance marketplace," Lucy Clarke, president of Marsh JLT Specialty and Marsh Global Placement, said in a statement. "Uncertainty, particularly related to COVID-19, and loss experience in many lines have both contributed to this three-year trend of increasing insurance costs."

Ms. Clarke said those conditions are leading many companies to rethink their insurance buying, including increasing retentions, reducing limits, and modifying policy terms and conditions.