Global commercial insurance prices rose 15% in the 2021 second quarter, continuing a stunning track record of increases but far from their peak at the end of 2020, according to a new Marsh report.
The Q2 numbers reflect the 15th consecutive quarter of price increases. But prices jumped 18% in the 2021 first quarter and 22% in the 2020 fourth quarter, which appears to be the peak, the report noted.
Marsh said pricing momentum has moderated due to a mostly slower rate of increase in property insurance and directors and officers liability insurance. At the same time, however, property insurance pricing climbed back up in Europe. In Asia, Latin America and the Caribbean, there was a moderate acceleration for financial and professional lines rate increases.
Cyber insurance continued to resist pricing moderation, jumping 56% in the U.S. and 35 percent in the UK, something Marsh said was driven by increased frequency and loss severity.
Composite prices increases for the second quarter grew 12% in the U.S., 28% in the UK, 13% in Continental Europe, 4% in Latin America and the Caribbean, 6% in Asia and 23% in the Pacific region, Marsh said.
Here are other U.S. highlights from the second quarter:
- U.S. D&O insurance for publicly traded companies grew 15%, lower than the 27% jump in the 2021 first quarter. The reason: higher competition and new capacity. In April and May 2021, excess rate increases were less than primary increases – something that hasn’t happened since January 2019.
- While cyber pricing in the U.S. jumped 56 percent in the quarter, that included a 68% leap in June, due to ransomware claims frequency and severity. Ransomware payments during the quarter typically exceeded $1 million. Many insurers narrowed their ransomware losses, with tightly management limit deployment on any one risk as a result, the report said.
- U.S. commercial property insurance pricing grew by 9%, but the rate of increase has decelerated steadily, falling from 18% in January to 7% in June.
- U.S. commercial casualty insurance pricing increased 6%, but excluding workers comp, the increase was 10%.
- U.S. excess liability is expected to experience continued rate pressure through 2021, though less than a year ago.
Marsh’s report is titled: “Global Insurance Markets: Pricing Increases Moderate in Second Quarter, July 2021.”
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