Insurance rates up again in Europe and UK on back of 8% global increases, finds Marsh

Commercial insurance rates rose by an average 4% in continental Europe during the third quarter of 2019 and 12% in the UK, according to the latest Global Insurance Market Index from Marsh. As previously reported by Commercial Risk Europe, global increases of 8% were the largest since the survey began in 2012 and the eighth consecutive quarter of average price rises. The Q3 global increase follows average global increases of 5.8% in the second quarter and 3% in the first quarter of 2019. All regions have now experienced four consecutive quarters of composite pricing increases, with the US, the UK and Asia all reporting average pricing increases of at least 5% in Q3. “Global insurance pricing increased 8% in Q3 2019, as the market continues to firm in most regions. Global pricing has now increased every quarter for nearly two years, and market capacity is starting to show signs of tightening in certain geographies and lines of business,” said Dean Klisura, president, global placement at Marsh. Composite rates increased by an average of 4% in continental Europe during the third quarter of 2019, compared with 6% in the US and 12% in the UK. The Pacific region had the largest price increase at 19%, a quarterly trend that has continued for almost three years. Global pricing increased in all three major product lines – property, casualty, and financial and professional liability – for the second straight quarter. Property insurance pricing increased on average by 10%, while financial and professional lines rose by nearly 14%. Casualty lines increased by just 1%. Third-quarter price increases of 4% in continental Europe continued an upward trend and compare with 2% in the first two quarters of 2019. The increases in Europe were driven primarily by property insurance, which rose 7%. This is the fourth consecutive quarterly increase for European property and the longest trend of pricing increases in five years. Casualty insurance pricing in continental Europe increased 1% in the third quarter, which was only the third rise in the last six years. Financial lines rates rose by an average 2%. Composite price increases in the UK jumped 12% in the third quarter, compared with a 6.3% rise in the second quarter and 2.9% in the first. The increases were driven mostly by higher pricing in property – up 6% in the third quarter – and financial and professional liability, with 20% increases in Q3. D&O and other financial lines varied by industry, with the largest increases felt by companies with US or Australian exposures, many of which experienced rate increases at or above 100%, according to Marsh. There was also a firming of terms and conditions by UK insurers, in particular for data and cyber coverage, Marsh said. UK casualty pricing overall increased by more than 4%. The US continued to experience a general trend of firming prices across the majority of coverage lines. Property rates in the US increased nearly 13% in the third quarter, the highest level recorded since the survey began. Both catastrophe and non-catastrophe exposures in the US showed double-digit price rises, with more than two thirds of property owners experiencing an increase, according to Marsh. US casualty pricing decreased by 1% in the third quarter, after rising for the first time in two years during the previous quarter. Many US buyers experienced no change in general liability and workers compensation pricing, although excess lines pricing increased 6%, with nearly 60% of clients experiencing an increase, said Marsh. Cyber and D&O pricing also increased in the US during the third quarter. Cyber insurance rates rose 3%, while financial and professional liability pricing increased by 11%, driven by directors and officers. This is the seventh consecutive quarter of increases for US financial lines, which was largely caused by increased litigation from event-driven lawsuits, such as data breaches, sexual harassment and safety.

Insurance rates up again in Europe and UK on back of 8% global increases, finds Marsh

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