Pace of Global Insurance Price Increases Slowed in First Quarter

Global insurance prices increased 18 percent during the first quarter of 2021, according to Marsh's Global Insurance Market Index.

The first quarter was the first quarter to show a decline in the average rate of premium increase since the index reported the first rise in global rates during the fourth quarter of 2017, Marsh said. It followed year-on-year average increases of 22 percent in the fourth quarter of 2020 and 20 percent during the third quarter.

The index showed increases across geographies moderated due to generally slower increases in property insurance and financial and professional lines, according to Marsh. The United Kingdom, with a composite pricing increase of 35 percent, down from 44 percent in 2020's fourth quarter, and the Pacific region, with a 29 percent increase, down from 35 percent in the fourth quarter, drove the global composite rate.

In the United States, the first-quarter rate of price increases was 14 percent, down from 17 percent in the fourth quarter. In Asia, the first-quarter rate was 8 percent, down from 11 percent the previous quarter, while in Latin America and the Caribbean, the increase was 5 percent, down from 9 percent during the prior quarter.

The survey also found that global property insurance pricing increased 15 percent on average during the first quarter, down from a 20 percent increase during 2020's fourth quarter. Casualty pricing was up 6 percent on average, down from a 7 percent increase the prior quarter.

The greatest increases were in financial and professional lines with prices up 40 percent during the first quarter, a decrease from a 45 percent fourth-quarter increase.

Cyber insurance ran counter to the trend, with price increases continuing to grow. First-quarter pricing increased 35 percent in the United States and 29 percent in the United Kingdom due to increases in the frequency and severity of losses. Fourth-quarter increases were 17 percent in the United States and 26 percent in the United Kingdom.

The Marsh Global Insurance Market Index is a proprietary measure of global commercial insurance price changes at renewal, representing the world's major insurance markets and including approximately 90 percent of Marsh's premium.