Global commercial insurance pricing up 18% in first quarter of 2021

Global commercial insurance prices increased 18 percent in the first quarter of 2021, according to the Global Insurance Market Index released by insurance broker and risk advisor Marsh.

The quarter is the first to show a fall in the average rate of increase since the index reported the first rise in global rates in Q4 2017. It follows year-on-year average increases of 22 percent in the fourth quarter and 20 percent in the third quarter of 2020.

According to the index, increases across geographies moderated due to generally slower rate rises in property insurance and financial and professional lines. The UK, with a composite pricing increase of 35 percent (down from 44 percent in Q4 2020) and the Pacific region, with a 29 percent increase (down from 35 percent in Q4 2020) drove the global composite rate. The rate of increase in the US was 14 percent (down from 17 percent), in Pacific 29 percent (down from 35 percent), in Asia 8 percent (down from 11 percent), and in Latin America and the Caribbean 5 percent (down from 9 percent).

Among other findings, the survey noted that global property insurance pricing was up 15 percent on average, down from the 20 percent increase in the fourth quarter 2020, and casualty pricing was up 6 percent on average, compared to a 7 percent increase in the prior quarter.

Pricing in financial and professional lines had the highest rate of increase across the major insurance product categories, at 40 percent, compared to 45 percent in the previous quarter.

Cyber insurance pricing diverged from the trend, with prices increasing in the first quarter by 35 percent in the US and 29 percent in the UK, driven by a rise in the frequency and severity of losses. In the previous quarter, cyber rates were 17 percent in the US and 26 percent in the UK.

Commenting on the report, Lucy Clarke, president, Marsh Specialty and Marsh Global Placement, said: “Although we will continue to see price increases in some lines and the market overall will remain challenging for our clients, we expect price increases to continue to moderate throughout the rest of the year.”

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