According to the latest Global Insurance Market Index from Marsh, global commercial insurance pricing rose 4% in the first quarter of 2023, the same as in the prior quarter.
This will be the twenty-second consecutive quarter in which composite pricing rose, which continues the longest run of increases since the inception of the index in 2012. Increases peaked at 22% in the fourth quarter of 2020.
Pricing increases across most regions moved within a small range compared to the previous quarter. Decreases in financial and professional lines, and continued moderation in the cyber market, were offset by increases in property rates according to the report.
According to Marsh, global property insurance pricing in the first quarter increased by 10% compared to 7% in the previous quarter. In the US, property pricing increased by 17%, compared to 11% in the fourth quarter. Financial and professional lines pricing declined for the third consecutive quarter.
The report notes that globally, cyber insurance pricing continued to moderate, with average price increases of 11% compared to 28% in Q4 2022. This was particularly evident in the most significant cyber insurance markets, with prices rising by 11% in the US and 10% in the UK, compared to 28% and 34%, respectively, in the prior quarter.
Compared to the previous year, in the UK, composite pricing increased by 3%. Continental Europe saw a 5% increase, and Asia there was an increase of 1%. In the US, pricing increased by 4%, in the Pacific there was a 7% increase, and in Latin America and the Caribbean by 8%.
Comparatively in Q4 of 2022, the rates were higher than that of this year. In the UK, composite pricingwas up by 4%, while in Continental Europe by 6%, and in Asia 2% in Q4. In the US, rates increased by 3% in Q4, in the Pacific by 5%, and in Latin America and the Caribbean by 7% in Q4 of 2022.
Commenting on the report, Lucy Clarke, President, of Marsh Specialty and Global Placement, Marsh said, “We welcome the favorable trends for our clients in D&O and cyber, but continued loss activity in property lines, and an increase in the cost of reinsurance and capital, combined with scarcity in certain lines, means that clients continue to face challenging market conditions. To help our clients address these issues, we continue to explore ways to bring new capacity to lines where it is most needed, as well as examining captive solutions and capital market alternatives.”
The report also noted other findings, which included the casualty pricing that was up 3% on average, the same rate as the previous quarter. For the third consecutive quarter, overall pricing in financial and professional lines has fallen. Driven by further rate reductions in the US and UK, average pricing declined by 5% in Q1, compared to a 6% decrease in Q4.
The report noted the concerns about the impact of inflation on asset values and claims costs continued to be a focus for insurers. For example, in the US total insured values at renewal increased by 9%, on average, in the quarter.