In the third quarter of 2023, global commercial insurance prices continued their upward trajectory, increasing by 3%, mirroring the previous quarter’s data. This insight emerges from the latest Global Insurance Market Index released by Marsh. Notably, this quarter marks the 24th consecutive quarter of pricing escalation. Narrowing in on cyber insurance, a decrease appears. Globally, cyber insurance pricing decreased by 2%, in contrast to a 1% increase in the prior quarter, marking the first average decrease in this sector since the second half of 2018.
The report reveals that the pricing landscape remained relatively consistent across most regions during Q3. The continuation of rate decreases in financial and professional lines primarily drove this. This is alongside the minor reduction in prices in the cyber insurance market. However, this was counterbalanced by notable property insurance increases. This is especially true in the United States, where property prices surged by an average of 14%.
Zooming in on specific regions, the United States saw a 4% increase in prices, consistent with the previous two quarters. Latin America and the Caribbean experienced a 10% price hike, up from 8% in Q2. At the same time, Europe witnessed a 4% increase, down from 5% in the previous quarter. The Pacific region saw a 1% increase, compared to 2% in Q2, and prices in Asia remained stable. In contrast, the United Kingdom recorded a 1% decrease in composite pricing, in contrast to a 1% increase in Q2. For the first time, the Global Insurance Market Index separately reported results for Canada. It experienced a 1% price decrease, and India, Middle East & Africa, where prices rose by 3%.
Additional key findings from the report include:
- Global property insurance prices saw a 7% increase in the third quarter, a decline from the 10% increase in the previous quarter. Casualty insurance prices increased by 3%, maintaining the same trend observed in the past three quarters.
- Financial and professional lines experienced a fifth consecutive quarter of declining average pricing. This was influenced by rate reductions and increased capacity, particularly in the UK, leading to a 6% decrease in average pricing in Q3, compared to an 8% decline in Q2.
The report also highlights the concerns of insurers in various regions regarding the potential impact of inflation on asset values and claims costs during renewal discussions.
Pat Donnelly, President of Marsh Specialty and Global Placement, commented on the findings, emphasizing the significance of the property market’s challenges and the importance of risk mitigation in today’s uncertain geopolitical and economic environment. “In an uncertain geopolitical and economic environment, we are exploring a wide range of risk mitigation options with clients that can help them to manage the broad range of risks they face, build greater organizational resilience, and gain positive outcomes from insurers at renewal,” he said.
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