Moderate insurance pricing increases seen in 1Q, says Marsh

Insurance pricing in the first quarter of 2021 in Asia increased by a moderate 8% year-over-year, according to Marsh, the world's leading insurance broker and risk advisor.

In its report titled “Global Insurance Markets: Pricing Moderate in First Quarter”, Marsh says that property insurance pricing rose by 10% in 1Q2021, the 10th consecutive quarter of increase.

For the property insurance pricing, other features in 1Q2021 were:

• Natural catastrophe risks experienced double-digit pricing increases in many areas.
• Large limit and complex property programmes experienced the largest increases, as was the case in 2020.
• Insurers continued to be attracted to the smaller market segments, offering competition and pricing stability..

Casualty insurance pricing was generally flat, increasing by 1%.

• The region saw ample insurance capacity and a benign claims environment.
• Areas where challenges continued included product recall and product liability, driven by claims performance and reduced insurer appetite.

Financial and professional lines pricing rose by 23%, the largest increase observed in several years and the eighth consecutive quarter of increase.

• Stringent underwriting guidelines, a reduction in capacity, and heightened risk selection — particularly from global insurers — contributed to pricing increases.
• Many clients increased retentions.
• Insurers showed limited appetite for and were selective on US-listed D&O, with rate increases ranging from 75% to 100% in some cases.
• For larger financial institutions in Asia, insurers sought to increase retentions and rating, placing coverage restrictions on some challenged organisations.
• Cyber insurance grew more challenging, and underwriters sought increased details and restrictions in coverage regarding ransomware and exclusionary language.
• Commercial crime coverage experienced capacity withdrawal over concerns about social engineering and phishing-triggered fraud. Primary limits experienced rate increases above 100%.

Global markets

Globally, commercial insurance prices rose 18% in the first quarter of 2021, the 14th consecutive quarter of price increases, which is the longest stretch of increases since the inception of the Marsh Global Insurance Market Index in 2012. The 1Q2021 increase was lower than the 22% seen in 4Q2020.

Regionally, composite pricing increases for the first quarter were as follows:

• Asia: 8%.
• US: 14%.
• UK: 35%.
• Continental Europe: 13%.
• Latin America and the Caribbean: 5%.
• Pacific: 29%.

Source: Asia Insurance Review