Global commercial insurance pricing continued its double-digit growth in the first quarter of 2021, but the rate of increase fell for the first time since late 2017, Marsh found in his latest Market Indexes report.
In addition, the moderation of rate hikes should continue, according to the firm.
“While we continue to see price increases on some lines and the market as a whole will remain difficult for our customers, we expect price increases to continue to moderate throughout the year,” Lucy Clarke, president, Marsh Specialty and Marsh Global Placement, said in prepared remarks.
Prices in the sector rose 18% in the first quarter, according to the report, but that’s down 22% in the fourth quarter of 2020 and 20% in the third quarter of 2020. According to Marsh, commercial rate hikes have fallen for the first time since global rates started to rise. in the fourth quarter of 2017.
Marsh has determined that rate hikes have moderated globally due to slower rate increases in property insurance and financial and business lines.
The UK, for example, saw a composite price increase of 35%, but this is down from 44% in Q4 2020. Similarly, the Pacific region generated an average price increase in the sector by 29%, compared to 35% in Q4 2020.
In the United States, rate hikes in the sector averaged 14%, compared to 17% in the fourth quarter. Asia saw average increases in commercial insurance rates of 8% in the first quarter, up from 11% in the previous quarter. Latin America and the Caribbean saw rate hikes of 5%, up from 9% in the fourth quarter of 2020.
Other results from the first quarter of the survey:
- Global home insurance pricing has risen 15% on average, compared to the 20% increase recorded in the fourth quarter of 2020. P&C prices climbed 6% in the first quarter, but increased 7% in the previous quarter.
- The financial and professional sectors saw the largest rate hikes, with a 40% jump during the quarter. In the previous quarter, however, rates climbed 45%.
- The pricing of cyber insurance has proven to be a notable exception to the trend towards moderation. Rates jumped 35% in the United States in the first quarter and 29% in the United States, due to increased frequency and severity of losses. Rates rose 17% in the US and 26% in the UK in the fourth quarter of 2020.
The full report can be found in Marsh’s Latest Global Insurance Market Index.
Business Insurance Pricing Trends
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