Commercial Rates Continue To Decline Through Q3: Marsh

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Commercial Rates Continue To Decline Through Q3: Marsh

According to data from re/insurance broker Marsh, the increase in global commercial insurance costs slowed to 6% in the third quarter of 2022 from 9% in the second quarter.

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The third quarter of 2022 will represent the 20th consecutive quarter of commercial rate rises, according to Marsh’s Global Insurance Market Index, but it also reveals that growth has been sluggish since Q1 of this year.

Analysts noticed that a general decline in some financial and professional lines, most notably directors and officers’ insurance, caused price increases across most areas to moderate.

The US, with a composite pricing increase of 5%, experienced the largest moderation in average price increases, falling from a growth rate of 10% in Q2.

Commercial Rates Continue To Decline Through Q3: Marsh

Meanwhile, rate increases slowed from 11% to 7% in the UK, from 7% to 5% in the Pacific region, and from 3% to 2% in Asia, staying the same in Latin America and the Caribbean at 5%, and at 6% in Continental Europe.

Among other findings, Marsh’s survey noted that global property insurance pricing was up 6% on average in the third quarter of 2022, the same level as the previous quarter, while casualty pricing was up 4% on average, compared to 6% in the previous quarter.

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Also, cyber insurance pricing continued to outshine other lines with increases of 53% recorded through Q3, although even here increases were seen to moderate, with prices rising by 48% in the US and 66% in the UK, compared to 79% and 68%, respectively, in the prior quarter.

The exclusion of cyber meant that, for the first time since 2017, overall pricing in financial and professional lines fell by 1% in Q3, compared to a 16% increase in Q2, driven by decreases in the US, UK, and Australia, and moderating rates of increase elsewhere.

Commercial Rates Continue To Decline Through Q3: Marsh

“The global business environment remains tough for clients,” said Lucy Clarke, President, of Marsh Specialty and Global Placement at Marsh. “Ongoing inflation and geopolitical instability are affecting all sectors and we expect even more challenging conditions in the already strained property catastrophe market following Hurricane Ian.

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“We are working closely with our clients to get the best possible outcomes from the market, as well as explore the whole range of options available to assess and address their risks including alternative and captive solutions.”

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