Despite continued pressure on pricing, ’the general trend of moderating price increases’ will ’continue through the rest of the year’, says Marsh president
Global commercial insurance prices increased by 15% in quarter two of 2021, according to the Global Insurance Market Index report released today (27 July 2021) by broker Marsh.
This marks the 15th consecutive quarter of rising rates in the global commercial insurance market, which is the longest period of increases since the broker started the index back in 2012.
Between Q2 2017 and Q2 2021, Marsh’s findings highlighted that global commercial insurance pricing peaked at 22% in the fourth quarter of 2020, before moderating across most regions due to a generally slower rate of increase in property insurance and directors’ and officers’ liability (D&O).
Europe, however, saw an increase in property insurance pricing in 2021’s Q2 (15%).
Cyber insurance pricing also went against the moderation trend, increasing by 35% in the UK in Q2– this was driven by increased claim frequency and severity.
Furthermore, high hazard sectors - such as food, waste recycling, heavy chemical and industrial industries - as well as risks in catastrophe bond (CAT) zones and organisations with poor loss activity, faced the greatest challenges at renewal.
Lucy Clarke, president at Marsh Specialty and Marsh Global Placement, said: “Clients continue to face a challenging risk and insurance landscape as the global economy emerges from the pandemic.
“Although we expect continued pressure on pricing, especially in loss affected lines, we also expect the general trend of moderating price increases to continue through the rest of the year.”
In the UK specifically, commercial insurance pricing has increased by 28% overall since the initial uptick in Q4 2017.
Regionally, composite pricing increases for Q2 consisted of 28% in the UK, 23% in the Pacific, 13% in Continental Europe, 12% in the US, 6% in Asia and 4% in Latin America and the Caribbean.