Global commercial insurance prices rose by 6% in the second quarter of 2019, nearly twice the increase observed in the first quarter, according to Marsh’s Global Insurance Market Index. The increase in the second quarter signifies the largest increase since 2012, with the market recording increased pricing in all major geographic regions and across multiple products.
Globally in the second quarter, pricing increased in all three major product lines, namely property, casualty, and financial and professional liability. The data showed that average pricing for property risk insurance increased by 8% in 2Q2019, while that of financial and professional lines increased by almost 10%. In general, increases were more pronounced in large accounts, particularly in property and directors and officers (D&O) liability. Composite pricing rose in all regions for the third consecutive quarter, largely driven by rates in property and D&O coverage, with the Pacific reporting the largest increase at 18%, the UK at 6%, the US at 5% and Asia at 4%.
Pacific composite pricing has seen an upward trend since 2015, driven by more expensive D&O rates, with many firms experiencing high double-digit increases, as well as rises in both CAT and non-CAT property, said the report.
In Asia, property insurance pricing rose 5% as international carriers sought pricing increases across the region. CAT pricing increased by double digits in several Asian countries, including Singapore, Hong Kong and India. Non-CAT pricing showed variability in the region, ranging from single-digit decreases to single-digit increases.
CAT losses in 4Q2018 impacted many insurers’ profitability, and price corrections have occurred at an accelerated pace. Certain Lloyd’s Syndicates have withdrawn from lines of business, impacting the Singapore hub. Casualty pricing declined 0.4%, continuing a trend towards a stable state after several years of moderate decreases. M