Global commercial insurance pricing continued its double-digit growth in the 2021 first quarter, but the rate of increase dipped for the first time since late 2017, Marsh found in its latest market index report.
What’s more, rate hike moderation is expected to continue, according to the firm.
“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 through the rest of the year,” Lucy Clarke, president, Marsh Specialty and Marsh Global Placement, said in prepared remarks.
Pricing in the sector grew 18 percent in Q1, according to the report, but that’s down from 22 percent in the 2020 fourth quarter and 20 percent in Q3 2020. According to Marsh, commercial rate hikes dipped for the first time since global rates started rising in the 2017 fourth quarter.
Marsh determined that rate hikes moderated globally due to slower rate increases in property insurance and financial and professional lines.
The UK, for example, had a composite pricing increase of 35 percent, but that’s down from 44 percent in the 2020 fourth quarter. Similarly, the Pacific region generated an average rate increase in the sector of 29 percent, down from 35 percent in Q4 2020.
In the U.S., rate increases in the sector averaged 14 percent, a dip from 17 percent in Q4. Asia experienced average commercial insurance rate hikes of 8 percent in Q1, down from 11 percent in the previous quarter. Latin America and the Caribbean saw 5 percent rate hikes, a dip from 9 percent in Q4 2020.
Other Q1 findings in the survey:
- Global property insurance pricing was up 15 percent on average, compared to the 20 percent jump in the 2020 fourth quarter. Casualty pricing climbed 6 percent in Q1, but it increased by 7 percent in the previous quarter.
- Financial and professional lines saw the greatest rate hikes, jumping 40 percent during the quarter. In the previous quarter, however, rates climbed 45 percent.
- Cyber insurance pricing proved to be a noteworthy exception from the moderation trend. Rates jumped 35 percent in the U.S. during Q1 and 29 percent in the U.S., due to more frequency and loss severity. Rates grew 17 percent in the U.S. and 26 percent in the U.K. in Q4 2020.
The full report is in Marsh’s latest Global Insurance Market Index.
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