Industrial insurance coverage pricing – what’s altering?
Marsh announced that global commercial insurance prices rose 15% in the third quarter of 2021, while cyber rates continued to rise due to higher losses. These were two of the key takeaways from the Broker and Risk Advisor’s Global Insurance Market Index released today.
Marsh found that the 15% increase in global commercial insurance prices represents the same rate of increase as in the previous quarter. However, while this is the 16th straight quarter of price increases, the rate of increase continues to slow in many businesses and most regions, suggesting that price increases may have peaked at 22% in the fourth quarter of 2020.
According to the report, price increases remained moderate in most regions due to slower growth in property insurance and D&O. Total price increased 27% in the UK (up from 28% in Q2 2021) and 17% in the Pacific region (up from 23% in Q2 2021) – two factors that continue to drive global total price.
Meanwhile, the rate of increase in Asia was 6% (as in the previous quarter), 2% in LAC (after 4%) and 10% in continental Europe (after 13%). The US is the only exception to this trend, with rates up 14% (up from 12% in the previous quarter). Marsh stressed that this was due to significant increases in cyber insurance tariffs and moderate increases in property and casualty insurance tariffs.
Other important results of the survey were:
- Property insurance prices rose by an average of 9% worldwide, compared to a 12% increase in the first quarter of 2021, while liability insurance prices increased by an average of 6% (as in the previous two quarters).
- The prices in the finance and professionals sectors again recorded the highest rate of increase in the most important insurance product categories at 32% compared to 34% in the previous quarter.
- Cyber insurance pricing did not follow the moderation trend. Prices rose 96% in the US (from 56% in the second quarter) and 73% in the UK (from 35% in the second quarter) due to the frequency and severity of ransomware claims.
Lucy Clarke, President of Marsh Specialty and Marsh Global Placement, commented on the report: “While the risk and insurance landscape remains challenging around the world, we expect interest rates to continue to fall in most lines. However, the pressure on tariffs in cyber insurance is likely to continue. The development of solutions for our customers in this segment remains a top priority for Marsh. “