Insurance rates follow hardening trend

International insurance prices continued to firm in 2012 Q2, according to a new global insurance index launched recently by Marsh.

The index takes into account client renewal data on property, casualty and financial and professional lines of business from 20 large economies across all continents. Results show that rates increased by 1.4% from April to June 2012 compared to the same period last year.

Marsh experts attributed the increased rates to:

• unexpected adverse loss developments from last year’s major catastrophes;

• an increased focus by insurers on the quality of data provided by insureds;

• a rise in attritional losses; and

• changes to the way insurers are calculating their risk-adjusted cost of capital.

Marsh introduced the Risk Management Global Insurance Index to support clients in planning insurance programs, according to Claude Yoder, head of global analytics at Marsh.

“With the global insurance market now clearly in a state of transition, understanding market trends is vital for insureds making business-critical decisions about their future risk management strategies,” Yoder said.

In other pricing news, MarketScout announced that average U.S. commercial property and casualty rates in June increased by 4%, matching price movement in May.