Average global insurance pricing in the fourth quarter of 2017 increased for the first time since Q1 2013, driven largely by global property insurance pricing following the third quarter’s large catastrophe losses, according to Marsh’s latest Market Index report.
The average pricing increased by 0.8 percent in the quarter, compared to a decrease of 1.9 percent in Q3 2017, said the report titled “Global Insurance Market Index, Fourth Quarter 2017.” *
“Losses from Hurricanes Harvey, Irma, and Maria, and wildfires in California drove increases in property pricing in the U.S.,” commented Dean Klisura, president, Global Placement and Specialties at Marsh. “Although property pricing generally increased, market capacity remains abundant. Pricing in all global regions showed either a moderate increase in the fourth quarter, or a slowing of the pace of decrease.”
Highlights of the report include:
- Property Insurance. Property insurance pricing across the globe increased an average of 3.2 percent in Q4, compared to a 2.4 percent decrease in the previous quarter.
- Global FinPro and Casualty. Financial and professional lines (FinPro) pricing increased 0.1 percent in Q4, compared to 1.4 percent in Q3 2017. On the other hand, casualty pricing in Q4 declined by 1.5 percent, compared to 1.7 percent in Q3.
- Regional Price Hikes. Average composite insurance pricing increased in the UK by 0.9 percent, compared to a drop of 2.7 percent in Q3. Latin America composite insurance had average price increases of 3.0 percent, compared to a Q3 drop of 0.9 percent. Australia saw an increase of 10.4 percent during the quarter, which marked its fourth consecutive quarter of price hikes. The report attributed this ongoing rate hardening in Australia to underwriters’ continuing response to poor underwriting results.
- Regional Price Declines. Average pricing decreased by 0.6 percent in the U.S., which was a slower rate of decline than seen in previous quarters; Q3 saw a 2.9 percent drop in U.S. composite insurance pricing. Continental Europe saw rates decrease by 1.1 percent, compared to a drop of 3.1 percent in Q3, while Asia saw an average of a 0.6 percent price decrease, compared with a decline of 1.8 percent in Q3.
- Cyber Insurance. Average U.S. cyber insurance pricing increased by 0.6 percent for the first time since Q4 2016 when a 1.4 percent hike was reported.
* The Marsh Global Insurance Market Index is a proprietary measure of commercial insurance premium pricing change at renewal, representing the world’s major insurance markets and comprising 90% of Marsh’s premium. The index captures a rolling four-quarter view of rate movement, providing a quarter-to-quarter look at changes in the marketplace.