Global commercial insurance rates up 9%, continuing trend of moderation: Marsh

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Global commercial insurance prices rose 9% in the second quarter of 2022 (up from 11% in the first quarter), continuing the trend of moderate rate hikes that began in the first quarter of 2021, according to the Global Insurance Market Index released by insurance broker Marsh.

Average price increases in most regions moderated due to slower increases and some declines in certain financial and professional sectors, Marsh said.

Cyber ​​insurance prices continued to rise significantly, although the pace of growth slowed in the quarter to 79% in the US and 68% in the UK, compared to 110% and 102% in the previous quarter, respectively.

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The UK, with a compound price increase of 11% (compared to 20% in Q1 2022), saw the largest decline in average price increases.

In the US, prices rose by 10% (down 12% in Q1 2022), in the Pacific by 7% (down from 10%), in Latin America and the Caribbean by 5% (down 6%), in Asia by 3%, and by 6% in Continental Europe (both the same as the previous quarter).

Among other things, the Marsh survey noted:

  • Property insurance prices rose on average by 6% in the second quarter of 2022, compared to a 7% increase in the first quarter of 2022.
  • Victim prices rose on average by 6%, compared to 4% in the previous quarter.
  • Overall price increases in financial and professional insurance, driven by cyber, again showed the highest rate of increase in the main insurance product categories, at 16%. However, this was lower than 26% in the previous quarter.
  • Driver and officer insurance rates fell in the US, UK and the Pacific.
  • The adequacy of valuations for insured or replacement values ​​has become a focal point for insurers, driven by concerns about inflation, supply chains and labor shortages, as well as claim inflation in cases where adjusted claim amounts exceed reported values.
  • In the US, customers with significant losses or exposure to secondary disasters, including wildfires, convective storms and flooding, typically experienced an above-average increase.
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“At a time of global business uncertainty, driven by the ongoing war in Ukraine, supply chain disruption and rising inflation, trading conditions remain difficult for many customers. We are also seeing the impact of rising inflation on insured assets and exposure growth, potentially impacting insurer pricing and appetite,” Lucy Clarke, president, Marsh Specialty and Global Placement, Marsh, said in a statement.

Source: Marsh

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