Property pricing up 6% in Q2

Property insurance pricing increased by 6% as pricing was challenging for clients with natural catastrophe exposures and in the food, waste, warehousing, and chemical industries. It had been up by 9% in the first quarter.

According to Marsh’s research, more clients with low/medium hazard risks experienced rate reductions and some insurers sought to offset challenging exposures by packaging property coverage with motor and casualty.

Underwriters demonstrated concern with valuation, putting focus on property damage and business interruption estimates, Marsh stated.

Casualty insurance pricing increased by 4%, compared to a 3% increase in the prior quarter.

Employers’ liability insurance pricing also increased by 4% compared to 3% in the previous quarter, driven by poor claims performance among some insurers.

Electric vehicles impacted the automobile liability insurance market, with leading insurers saying that damage repair costs for EV’s run approximately 25% higher that for internal combustion vehicles.

Financial and professional lines

Financial and professional lines pricing experienced a decline in some products, the report detailed, although the overall average rate increased due to the impact of continued increase in cyber insurance.

Directors and officers’ pricing declined in the single digits in the second quarter. The D&O market experienced substantial rate decrease on larger multinational accounts. Midsize and smaller companies continued to experience rate increases.

While the cyber insurance market continued to be challenging the rate of increase moderated to 68%, compared to 102% in the first quarter. There were still policyholders who experienced triple digit rises, Marsh flagged.

Overall, Marsh measured global insurance pricing as rising by 9% in the second quarter of 2022 compared to 11% in Q1, according to the Marsh Global Insurance Market Index.

While this is the 19^th consecutive quarter of increases, the pace of rate increases slowed for the sixth consecutive quarter, as global composite increases peaked at 22% in Q4 in 2020.

Global business uncertainty

Commenting on the report, Lucy Clarke, president of Marsh specialty and global placement, said: “At a time of global business uncertainty, driven by the ongoing war in Ukraine, supply chain disruption, and rising inflation, trading conditions remain tough for many clients.

“We are also seeing the impact of rising inflation on insured values and exposure growth, which has the potential to impact pricing and insurer appetite.”

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