August 15th, 2018

Global Insurance Prices Rise for Third Consecutive Quarter

Posted at 1:00 AM ET

dean_kisura_hsDean M. Klisura President, Global Placement and Specialties, Marsh

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Global commercial insurance prices rose, on average, in the second quarter of 2018, marking a third consecutive quarter of increases, according to the most recent Marsh Global Insurance Market Index. The increase in the index was driven largely by pricing for property and financial and professional insurance lines.

In the United States, overall insurance pricing remained flat in the quarter; the United Kingdom showed a 0.8 percent increase; while in Continental Europe pricing declined 1.5 percent. Australia, once again, had the largest increases in both the index (up 13 percent) and in individual coverage lines.

Financial and professional lines pricing continued to accelerate, increasing 3.3 percent on average, outpacing the rise in property pricing, which increased 2.3 percent. This was the third consecutive quarter in which global financial and professional lines pricing increased. Conversely, global casualty pricing decreased 1.4 percent in the quarter, a trend that has continued for several years.

Global pricing for property risks increased 2.3 percent on average, lower than the previous two quarters, which saw increases of 2.7 percent and 3.2 percent, respectively. The catastrophe events of 2017 continued to impact pricing as carriers reacted to the resulting increases in claim notices and indemnity costs. In some markets, for example, Australia, where pricing increased more than 12 percent, there is evidence of reduced capacity as some carriers have begun to adjust their underwriting appetite.

Property pricing showed variability by geography and risk class. The increase in pricing observed in the United States and Australia was offset by pricing declines in the United Kingdom, Continental Europe, Latin America, and Asia. Similarly, catastrophe-exposed risks are generally seeing pricing increases several percentage points higher than non-CAT risks.

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