The Marsh Global Insurance Index reported that global commercial insurance pricing is on the rise for the second quarter in a row. This continued rise in rates is even more surprising when you consider that before last quarter, rates declined for four and half years in a row.
Experts believe that this rise in rates is largely due to property insurance pressure, which has continued to rise after the catastrophe-laden events of the third quarter of 2017. Financial and professional line increases have also contributed to the rates rise.
According to this report, pricing for property risks increased 2.7% during the first quarter of 2018. In comparison, property risks increased 3.4% during the final quarter of 2017.
It is worth noting that property increased vary by geographical region. If you just look at the United States, average property prices increased 3% over the last two quarters.
Marsh president of global placement and specialties Dean M. Klisura, spoke with the insurance business magazine about these rate increases. “The impact of catastrophe losses last year continued to impact property insurance prices in the US and elsewhere,” said Klisura. “However, overall market capacity remains strong with pricing decreases continuing in many regions for lines of business less affected by losses.”.
Luckily, it’s not all bad news for those in the U.S. market. The United States saw continued declines in casualty line pricing. The U.S. cyber insurance market has now seen price decreases during four of the last five quarters. This quarter the U.S. cyber insurance market saw a 1.7% decline.
The insurance industry is in a state of flux—the continued innovation if “insurtech” companies are changing the way consumers interact with insurers. Given that state of change, these annual pricing metrics are certainly something that is worth keeping an eye on.