Global commercial insurance prices jumped 22% in Q4 of 2020, according to Marsh’s “Global Insurance Market Index.”
According to Marsh this is coming on the back of year-on-year average increases of 20% in the third quarter and 19% in the second quarter of 2020. However the increase revealed geographical differences as price increases were minor for some lines of insurance.
For instance, property insurance, and directors and officers (D&O) insurance pricing in the US is showing signs of moderating increases, and similar patterns can be seen in certain property and casualty lines in Continental Europe, and Latin America and Caribbean (LAC). Marsh noted that regionally, Continental Europe, Asia, and LAC have now experienced moderate levels of price increases for three quarters.
Marsh attributed the average composite price increase in Q4 to rising property insurance rates, as well as spikes in financial and professional lines. Other findings included the following:
*Global property insurance pricing was up 20% on average, dropping slightly from the 21% increase experienced in Q3, though this was balanced out by a larger spike in global financial and professional lines, which were up 47% on average, compared to a 40% increase the previous quarter.
*Casualty pricing was up 7% on average, compared to a 6% increase in the previous quarter.
*Composite pricing in the fourth quarter increased in all geographical regions for the ninth conservative quarter.
*All regions, except LAC (9%), reported double-digit price increases, with the UK in the lead (44%), the Pacific region close behind (35%), and theUS in the third place (17%). According to Marsh, the rate of increase in the fourth quarter either declined or remained the same in all regions outside the UK and Pacific.
*Public company D&O coverages continue to see large spikes in rates, especially in key markets like the UK and Australia. While D&O price increases may be moderating in other regions, prices are still up between 25% and 50% in many countries.
The president of Marsh JLT Specialty and Marsh Global Placement, Lucy Clarke, bares mind, “The global insurance marketplace was very challenging in 2020, and we expect these conditions to persist through the first half of 2021,” he therefore, gives open layered stake; “Although we are seeing signs that price increases are beginning to plateau in some lines, our clients continue to face tough trading conditions. We are committed to presenting all risk mitigation and insurance placement options to our clients, and to offer advice and support as they consider adjusting their insurance buying patterns.”
