Broker and risk advisory company Marsh says around the world overall insurance pricing is moderating and property coverage remains challenging, as commercial insurance pricing rose three per cent in the second quarter of 2023, down slightly from the four per cent reported in the prior quarter.
The Marsh Global Insurance Market Index report says the second quarter of 2023 was the 23rd consecutive quarter in which composite pricing rose. This, they say, continues the longest run of increases seen since the inception of the index back in 2012. “Increases peaked at 22 per cent in the fourth quarter of 2020,” the report states.
Decreases in pricing for financial and professional lines and decreases or moderating increases in cyber insurance were offset by rising property insurance prices. This line experienced the largest increase during the quarter. “Globally, cyber insurance pricing increases moderated to one per cent, compared to 11 per cent in the prior quarter and 28 per cent in the fourth quarter of 2022,” they write.
Broken down, property insurance pricing increased 10 per cent and casualty insurance increased three per cent while financial and professional lines insurance declined eight per cent.
In Canada, commercial insurance pricing and casualty pricing were both down one per cent. Property insurance pricing rose one per cent, financial and professional lines insurance pricing declined seven per cent and cyber insurance pricing declined three per cent. (Year ago figures were not available.)
In the United States, property insurance pricing rose 19 per cent compared to 17 per cent in the first quarter. Total insured values grew nine per cent; underwriters reportedly focused on inflation and insurance to value during the period. “Pricing increases were primarily driven by the cost of reinsurance and capital, strong capacity demand, limited new insurers and ongoing losses,” they write. The report also breaks out these figures for the United Kingdom, continental Europe, Latin America, Asia and the Pacific.
In the United States, cyber insurance pricing declined four per cent in the second quarter of 2023. In the first quarter pricing gained 11 per cent. They say excess layer premium reductions continue to drive down total program pricing.
“Increased competition, improved cybersecurity controls and a reduction in ransomware attacks in 2022 were key factors behind the continued pricing improvement. However, there was an increase in the number of ransomware claims reported in the second quarter,” they state. “Coverage generally continued to broaden, including some instances of removal of coinsurance requirements and increased sub-limited coverage enhancements; insureds with improved cyber security controls were generally able to negotiate lower retentions.”