Cyber Insurance Rate Hikes Moderate, While Property Prices Rise in Most Regions: Marsh

April 27, 2023

Average global cyber insurance prices continued to moderate in the first quarter, with average price increases of 11%, compared to 28% in Q4 2022, according to the Global Insurance Market Index published by insurance broker Marsh.

This was particularly evident in the largest cyber insurance markets, with prices rising by 11% in the US and 10% in the UK, compared to 28% and 34%, respectively, in Q4 2022, said Marsh, explaining that moderating cyber rates can be attributed to new market entrants bringing increased capacity and competition.

On the other hand, property insurance pricing increased in most regions in the first quarter, led by the US which rose by 17%, compared to an 11% rise in the prior quarter. On average, global property insurance pricing was up 10% in Q1 2023, compared to a 7% increase in Q4 2022.

Pricing moderation also was seen in average global commercial (composite) insurance prices, which increased 4% in Q1 2023, the same level as the fourth quarter of 2022, Marsh added.

Q1 marked the 22nd consecutive quarter in which composite pricing rose, continuing the longest run of increases since the inception of the index in 2012, said Marsh, noting that rates peaked at 22% in the fourth quarter of 2020.

Pricing increases across most regions moved within a small range compared to the previous quarter as decreases in financial and professional lines, and continued moderation in the cyber market, were offset by increases in property rates, Marsh said.

In the UK, composite pricing increased by 3% (down from a 4% increase in Q4 2022), in Continental Europe prices rose by 5% (down from 6% in Q4), and in Asia by 1% (down from 2% in Q4). In the US, pricing increased by 4% (up from a 3% increase in Q4), in Pacific by 7% (up from 5% in Q4), and in Latin America and the Caribbean by 8% (up from 7% in Q4).

Other findings in the survey include:

  • Casualty pricing was up 3% on average, the same rate as the previous quarter.
  • For the third consecutive quarter, average pricing in financial and professional lines fell, driven by further rate reductions in the US and UK. Average global FinPro pricing declined by 5% in Q1, compared to a 6% decrease in Q4.
  • 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, during the first quarter.

“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,” commented Lucy Clarke, president, Marsh Specialty and Global Placement, Marsh, in a statement.

“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,” Clarke added.

Marsh said all references to pricing and pricing movements in the report are averages, unless otherwise noted. For ease of reporting, all percentages regarding pricing movements are rounded to the nearest whole number.

Source: Marsh

Topics Trends Cyber Pricing Trends Property

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