Globally, the P&C insurance market remains on the hard side, but there are signs of melting, based on the results of the latest Global Insurance Market Index released by Marsh.
Global commercial insurance prices increased 13% in 2021 Q4, continuing a trend of moderating rate increases that began in 2021 Q1, Marsh reports. “While this is the 17th consecutive quarter of increases, the rate of increase continues to moderate in many lines of business and in most geographies.”
Pricing increases across most regions – Canada was not included in the study — moderated due to a slower rate of increase in property insurance and directors and officers’ liability (D&O). The U.K. showed a composite pricing increase of 22% (down from 27% in Q3), while in the U.S., prices increased 14% (steady from the previous quarter).
Cyber continues to be a problem child not only in Canada – where the industry’s loss ratio in cyber is still in the unprofitable range of more than 100%, according to the latest figures from Canada’s solvency regulator – but elsewhere in the world.
Cyber insurance rates continued to rise, driven largely by the continued increase in the frequency and severity of ransomware claims. Many insurers sought to tighten coverage terms and conditions in 2021. Prices increased 130% in the U.S. (up from 96% in Q3), and 92% in the UK (up from 73%).
“We are operating in a challenging risk and insurance market, and will continue to focus on developing solutions in classes such as cyber, which will continue to be difficult for both clients and insurers,” Lucy Clarke, president of Marsh Specialty and Marsh Global Placement, comments in a release. “More broadly, however, we expect continued moderation in rate increases through 2022, a trend which will be welcomed by our clients.”