The Marsh data was included in its index for Q2 2012.
If the forecasts based on the most recent insurance news report from broker, Marsh, are accurate, then the worldwide prices are aligned for a third consecutive quarter of increases, as the industry works to strengthen its financial situation following the sizable catastrophe claim payments in 2011 that approached record levels.
The second quarter 2012 average global prices were 1.4 percent higher than they were last year.
According to the Marsh Risk Management Global Insurance Index – which tracks the rates for their insurance news in 20 major countries – prices have been on the rise since September. The index performs a tally based on surveys that are conducted by insurers and other brokers, and calculates the average prices.
The most recent insurance news shows that there has been a modest price increase despite 2011’s losses.
Last year brought about insured losses of approximately $116 billion, which is the second most costly year on record for natural catastrophes. In previous years, large payouts have led to significant spikes in prices in the industry as insurers with smaller funds availability work to rebuild, opening up the doors for other players to charge higher prices.
Analysts are explaining the current trend as a reflection of the continued presence of accumulated capital among the insurers, as investors shying away from equity and bond markets pour their funds into the marketplaces of insurers and reinsurers, instead. This is frequently done by way of catastrophe bonds and other securities.
According to Marsh’s insurance news, the largest increases in price have occurred within the markets that were most heavily impacted by the many massive catastrophes that occurred in 2011. For example, in Japan, the property catastrophe coverage rates increased by an average of 30 percent following the Tohoku earthquake and subsequent tsunami that occurred in March 2011.
Similarly, in the largest market in the world, American insurance news has shown that well over half (60 percent) of insurers were required to pay a larger amount of property coverage in 2012’s second quarter, according to the report released by Marsh.