Global rates rise for second quarter but European market remains soft

Global commercial insurance rates have risen for the second consecutive quarter, up 0.9% on average, driven by increases in property business and finpro lines, according to Marsh. However, overall pricing continues to fall in continental Europe, even though the rate of decline slowed again, the broker’s global insurance market index shows. The rise in global commercial insurance pricing was driven by an average increase of 2.7% for property insurance and 1.8% for finpro in the first quarter, while casualty pricing fell by 1.7%, according to Marsh. Global Q1 commercial insurance rate increases were on the back of a 0.8% rise in the last quarter of 2017, which followed four and half years of price decreases. Most regions showed moderate price rises during Q1, or smaller price decreases. Generally, both the increases and decreases fell compared to the previous quarter, suggesting the market is flattening out across the board. In continental Europe, overall pricing fell 0.8% compared to a decline of 1.1% last quarter. Prices fell by 0.5% in the US, compared to 0.6% in Q4 2107. In Asia, average rates fell 1.8% and by more than the 0.6% figure recorded last quarter. In the UK, prices were up a touch by 0.2% – compared to a rise of 0.9% at the end of last year. Rates were also up in Latin America at 0.8%, compared to a rise of 3% in Q4 2017. In Australia, rates continue to rise steeply – up 11.6%. Commenting on the findings, Dean Klisura, president of global placement and specialties at Marsh, said: “The impact of catastrophe losses last year continued to impact property insurance prices in the US and elsewhere. However, overall market capacity remains strong with pricing decreases continuing in many regions for lines of business less affected by losses.” Marsh’s global insurance market index shows that pricing is generally stable across continental Europe, with competition high in most sectors. However, Marsh said insurers are starting to take firmer positions on pricing. Property lines were the only major coverage area in the region to rise, and even then up just 0.1% on average. Marsh said that average property catastrophe pricing increased in the low-to mid-single digits in larger European countries, while remaining flat in most others. The average rate of decline increased slightly in continental European casualty lines from the prior quarter to 1.6%, primarily driven by general liability. In finpro lines, European buyers saw average rate decreases slow to 1.6%, with D&O prices stable or falling in the low-single digits in most countries. Renewal pricing increased by 3.3% in finpro lines in the UK. Marsh said this was driven by a deteriorating claims environment. Property prices fell by 1.6% in Q1 after a rise of 1.1% in the preceding quarter, and UK casualty rates fell by 2.1% after a rise of 0.8%. In the US, property rates were up 2.9%, but this represents a fall on the 3.6% rise seen in Q4 2017 and suggests increases caused by cat losses might not stick. US casualty pricing was down 3% and for the fourth consecutive quarter, while FinPro lines were flat after falling for nine quarters in a row. In Asia, property rates were down 1.4%, casualty rates 2.7% and finpro 2.2%. In Latin America, property rates were down 1% but casualty rates were up 4.3% and for the seventh consecutive quarter. Latin American finpro lines were up 1.5% on average. The Australian market saw average insurance prices rise for the fifth consecutive quarter and across the major product lines. Marsh said this is a market response to poor underwriting performance in recent years. Australian property rates were up 12.5% in Q1, with casualty up 5.7% and finpro 15%.

Global rates rise for second quarter but European market remains soft

Want to read this article?

Read Next

Marsh tracks slowdown in global Q1 rate hikes

Markel names head of terrorism in London

Insurers defend Nord Stream’s €400m lawsuit as act of war

Allstate posts nat cat loss of $343m for March

UAE flash flood losses manageable as insurers adapt to changing weather

Marsh tracks slowdown in global Q1 rate hikes

Markel names head of terrorism in London

Insurers defend Nord Stream’s €400m lawsuit as act of war

Allstate posts nat cat loss of $343m for March

UAE flash flood losses manageable as insurers adapt to changing weather

Want to read this article?

Read Next

Marsh tracks slowdown in global Q1 rate hikes

Markel names head of terrorism in London

Insurers defend Nord Stream’s €400m lawsuit as act of war

Allstate posts nat cat loss of $343m for March

UAE flash flood losses manageable as insurers adapt to changing weather

Related Articles