Global commercial insurance price increases slow after years of gains

NEW YORK: Global commercial insurance prices rose 18% in the first quarter of 2021 from a year earlier, on average, but the increase was less than in other recent quarters and marks the first slowing in more than three years, insurance broker Marsh McLennan Cos Inc said on Tuesday.

Marsh’s global insurance index registered average annual price increase of 22% and 20% in the fourth quarter and third quarters of 2020, respectively, Marsh said. The decline in the growth rate was the first since the index of rates began rising in the fourth quarter of 2017.

The data, which also showed the rate of increase slowing in all regions of the world, provide an indication that rate rises may be topping out after climbing for 13 consecutive quarters.

“We expect price increases to continue to moderate throughout the rest of the year,” Lucy Clarke, president of Marsh Specialty and Marsh Global Placement, said in a press release announcing the study. Cyber insurance marked the one exception to slowing price increases: rates rose 35% in the US, up from 17% in the fourth quarter of 2020, and 29% in the UK, up from 26%, Marsh said.

Cyber insurance costs have been climbing as more companies, in sectors from banking to retail, rely on online technology while ransomware attacks are growing in size, frequency and sophistication, insurance experts say.

Prices of property insurance, globally, rose 15% in the first quarter. Prices for casualty insurance rose 6% and the rise was 40% in financial and professional lines, which includes coverage for directors and officers and cyber risk.

Marsh noted its average increases are derived from prices experienced by a variety of different customers and reflect price changes that can be higher or lower than the average.