Global Commercial Insurance Rates Rise 4% in Q4, Continuing Moderating Trend: Marsh

Global commercial insurance prices increased 4% in the fourth quarter of 2022, down from a 6% increase in Q3 and a 9% increase in Q2, which is a continuation of a trend of moderating increases that began in Q1 2021, according to Marsh’s Global Insurance Market Index.

While this is the 21st consecutive quarter of increases, pricing increases moderated in most regions with the exception of financial and professional lines, which decreased for only the second time since Q3 2017.

The quarter’s pricing moderation was driven largely by a 6% decrease in financial and professional lines and the continued moderation in cyber pricing, Marsh said.

In the U.S., composite pricing increased by 3% (down from 5% in Q3 of 2022) while rates in the UK were up by 4% (down from a 7% increase in Q3), Marsh said. Rates increased in the Pacific region by 5%, in Asia by 2%, and in Continental Europe by 6% (all level to the previous quarter). In Latin America and the Caribbean prices rose by 7%, a rise on the 5% increase recorded in Q3.

Other findings from the report include:

Global property insurance pricing was up 7% on average in the fourth quarter of 2022, compared to a 6% increase in the previous quarter; casualty pricing was up 3% on average, compared to 4% in Q3. For the second consecutive quarter, overall pricing in financial and professional lines fell. Driven by further rate reductions in the U.S., UK and Australia average pricing declined by 6% in Q4, compared to a 1% decrease in Q3.

Globally, cyber insurance pricing increased 28% in Q4 2022, compared to a 53% increase in Q3. In the largest cyber insurance markets, the rate of increase continued to moderate significantly with prices rising by 28% in the U.S. and 34% in the UK, compared to 48% and 66%, respectively, in the prior quarter.

Concerns about the impact of inflation on asset values and claims costs continued to be a focal point for insurers at renewal in most regions.

“After a challenging 2022, our clients will continue to face a tough operating environment in 2023. With a slowdown in the global economy, in addition to ongoing inflation and geopolitical tensions, many clients face significant headwinds,” commented Lucy Clarke, president, Marsh Specialty and Global Placement, Marsh.

“Pricing for property risks continues to be impacted by the high level of losses in 2022, especially resulting from Hurricane Ian,” Clarke continued.

Marsh said that all references to pricing and pricing movements in its report are averages.

Topics Trends Commercial Lines Business Insurance Pricing Trends