24-08-2020
Composite pricing continues to increase
Insurance AlertssComposite pricing continues to increase
Insurance pricing in the second quarter of 2020 in Asia increased 9% year-on-year, according to Marsh's quarterly Global Insurance Market Index, a proprietary measure of global commercial insurance premium pricing change at renewal, representing the world's major insurance markets and comprising nearly 90% of Marsh's premiums.
The Index covers three broad branches: property insurance, casualty and financial and professional liability.
Property insurance pricing
Property pricing increased to varying degrees in all territories across Asia, at an average of 12% in 2Q2020, with the exception of China, which benefitted from abundant domestic capacity.
Large, complex, and multinational programmes saw the greatest impact on pricing, deductibles, and limits. CAT-exposed business in the region saw double-digit increases and a continued reliance on international markets for support. Midsize and SME clients benefitted from strong demand in domestic markets.
Casualty pricing
For a ninth consecutive quarter, in the second quarter, casualty pricing was generally flat, following several years of moderate decreases.
Financial and professional liability pricing
Financial and professional liability pricing rose by 14% in 2Q2020, the largest increase observed in several years and the fifth consecutive quarter of increases. A reduction in capacity, particularly from global insurers, contributed to pricing increases.
US listed D&O was the most affected by pricing increases, some as high as 100%. Limited insurer appetite drove the market. Financial institutions generally experienced rate increases across all coverage lines, as insurer appetite for these risks was limited. The same held true for commercial crime.
Source: Asia Insurance Review
