The COVID-19 coronavirus pandemic crisis and other sizeable losses played a role, says Marsh research.
Worldwide average commercial insurance rates rose by 19 percent during this year’s second quarter, says the Global Insurance Market Index issued by Marsh.
The broker and risk adviser recorded the largest premiums hike since the index began in 2012.
The commercial insurance rates increase follows other substantial year over year average increases. In Q1 2020, there was a 14 percent rise, and in Q4 2019, there was an 11 percent rise. As was the case in this year’s first quarter, the hike that occurred during the second quarter of this year was primarily driven by rising property insurance rates as well as increases in financial and professional lines.
This data was collected as a part of a Marsh survey which also produced several other findings.
Other findings Marsh produced in the commercial insurance rates survey included the following.
- Global property insurance rose by 19 percent.
- Global financial and professional lines rose by 37 percent.
- Global casualty pricing rose by 7 percent.
- For the 7th consecutive quarter, Q2 composite pricing rose in all geographic regions.
- The UK (31 percent), Pacific (31 percent), US (18 percent), and Continental Europe (15 percent) experienced increases primarily driven by rises in property and directors and officers (D&O) forms of coverage.
- Some D&O markets experienced especially high increases. For instance, US public firm D&O prices rose by 59 percent. Over 90 percent of US clients experienced an increase of some level. In the UK, the average D&O increase was over 100 percent. In Australia, the situation was comparable due to a lack of competition bringing on a shortage in capacity.
“While pricing movements this quarter were impacted by losses related to COVID-19, other large losses contributed to overall pricing pressures,” said Marsh president of Global Placement and Advisory, Dean Klisura while discussing the trends and findings in the commercial insurance rates data. “As insurers continue to work through claims in property and D&O, and with the full cost of COVID-19 still developing, upward pressure on pricing is anticipated for the balance of 2020.”