Commercial insurance pricing up 22pc in Q4 2020

Commercial insurance pricing increased by an average of 22% in the fourth quarter of 2020, according to Marsh’s Global Insurance Market Index -- representing the largest increase since the index began in 2012, and following average increases of 20% y-o-y. Companies in the UK and Pacific saw the greatest rises.

The data does suggest that increases may be starting to plateau in some lines and in certain geographies. Property insurance and D&O in the US shows signs of “moderating increases”, Marsh notes, with similar trends in certain P/C lines in Continental Europe and Latin America and Caribbean. Regionally, Continental Europe, Asia, and LAC have now experienced moderate levels of price increases for three quarters.

The average composite price increase in the fourth quarter was driven principally by property insurance rates and financial and professional lines -- up 47% on average, up from a 40% increase the previous quarter. Casualty pricing was up 7% on average, compared with a 6% increase in the prior quarter.

Composite pricing in the fourth quarter increased in all geographic regions for the ninth consecutive quarter.

Public company D&O coverages continued to see large increases, especially in major markets such as the UK and Australia. Although D&O price increases may be moderating in other regions, the data suggests that prices are still up between 25% and 50% in many countries.

Commenting on the figures, Lucy Clarke, president, Marsh JLT Specialty and Marsh Global Placement, said: “The global insurance marketplace was very challenging in 2020, and we expect these conditions to persist through the first half of 2021. 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.”

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