Cyber rate hikes slowing – Marsh

Cyber insurance rates are continuing to rise, albeit at a slower pace, according to data published today by Marsh. Financial and professional rates fell for a second quarter, according to the company’s quarterly Global Insurance Market Index, which shows that, in Q4 2022, prices increased 4% across the board (down from a 6% increase in Q3 and a 9% increase in Q2).

Whilst this is the 21st consecutive quarter of increases, growth across most regions moderated or remained the same due to an overall decrease in certain financial and professional lines, most notably D&O. In the US, 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).

Rates increased in Pacific by 5%, in Asia by 2%, and in Continental Europe by 6% (all the same as the previous quarter). In Latin America and the Caribbean prices rose by 7%, a rise on the 5% increase recorded in Q3.

Commenting on the report, Lucy Clarke, president, Marsh Specialty and Global Placement, Marsh said: “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.

“Pricing for property risks continues to be impacted by the high level of losses in 2022, especially resulting from Hurricane Ian. We are working with our clients to examine a wide range of options, including the increased use of captives and alternative risk financing options, to address their needs and to obtain the optimal outcome for them from the market.”

Global commercial rates: Notable findings (Source: Marsh)

• Global property insurance pricing was up 7% on average in the fourth quarter of 2022, compared with a 6% increase in the previous quarter; casualty pricing was up 3% on average, compared with 4% in Q3.

• For the second consecutive quarter, overall pricing in financial and professional lines fell. Driven by further rate reductions in the US, UK and Australia average pricing declined by 6% in Q4, compared with a 1% decrease in Q3.

• Globally, cyber insurance pricing increased 28% in Q4 2022, compared with 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 US and 34% in the UK, compared with 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.

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