Rate of increase in global commercial insurance rates moderates but cyber rates continue steep rise
- Published: Thursday, 28 April 2022 08:56
Global commercial insurance prices increased 11 percent in the first quarter of 2022, according to the Global Insurance Market Index released by Marsh, continuing a trend of moderating rate increases that began in Q1 2021. While this is the 18th consecutive quarter of increases, the rate of increase continues to moderate across most lines of business and in almost all geographies.
Pricing increases across most regions moderated due to a slower rate of increase in financial and professional lines. The UK, with a composite pricing increase of 20 percent (down from 22 percent in Q4 of 2021), and the US, where prices increased 12 percent (down from 14 percent) continued to drive the global composite rate. The rate of increase in Pacific was 10 percent (down from 13 percent), in Asia 3 percent (down from 4 percent) and 6 percent in Continental Europe (down from 9 percent). For the second consecutive quarter, the one exception to the moderating trend was Latin America and the Caribbean where rates increased by 6 percent (up from 4 percent the previous quarter).
Cyber insurance rates continued to rise driven largely by the continued increase in the frequency and severity of ransomware claims with many insurers seeking to tighten coverage terms and conditions, especially in relation to the conflict in Ukraine. Prices increased 110 percent in the US (down from 130 percent in Q4 2021), and 102 percent in the UK (up from 92 percent).
Increases in inflation are already impacting claims in several lines of business and have been flagged by insurers as a concern in affected geographies.
Commenting on the report, Lucy Clarke, President, Marsh Specialty and Marsh Global Placement, said: “The war in Ukraine, while most importantly a humanitarian tragedy, has added pressure to what is already a challenging insurance market for our clients. We are also beginning to see the impact of rising inflation on loss costs and exposure growth, which in turn could affect pricing. However, market fundamentals remain strong and we expect rate increases to continue their moderating trend.”