The figures continued a trend of moderating increases that began in the first quarter of 2021, according to the index. While Q4 marked the 21st consecutive quarter of increases, price rises moderated in most regions with the exception of financial and professional lines, which decreased for only the second time since the third quarter of 2017.
Price increases in most regions moderated or stayed the same due to an overall decrease on certain financial and professional lines, especially directors and officers insurance, Marsh reported. In the US, composite pricing increased by 3% – down from 5% in Q3 of 2022. In the UK, rates rose by 4%, down from a 7% increase in Q3. Rates increased in the Pacific region by 5%, in Asia by 2%, and in continental Europe by 6%, all the same as the previous quarter. In Latin America and the Caribbean, prices were up by 7%, an increase from Q3’s 5% rise.
Among the survey’s findings:
- Global property insurance pricing rose 7% on average in the fourth quarter, compared to a 6% increase in Q3. Casualty pricing rose 3% on average, from 4% in the third quarter
- Overall pricing in financial and professional lines fell for the second consecutive quarter. Pricing declined by 6% in Q4 (compared to a 1% decrease in Q3), driven by further rate reductions in the US, the UK and Australia
- Cyber insurance pricing was up 28% globally in the fourth quarter, compared to a 53% increase in Q3. In the largest cyber insurance markets, the rate of increase continued to moderate significantly, with prices rising by 28% in the US (compared to 48% in Q3) and 34% in the UK (compared to 66% in Q3)
- The impact of inflation on asset values and claims costs continued to be a key concern for insurers at renewal in most regions
“After a challenging 2022, our clients will continue to face a tough operating environment in 2023,” said Lucy Clarke, president of Marsh Specialty and Global Placement. “With a slowdown in the global economy, in addition to ongoing inflation and geopolitical tensions, many clients face significant headwinds. Pricing for property risks continues to be impacted by the high level of losses in 2022, especially resulting from Hurricane Ian. We are working with our clients to examine a wide range of options, including the increased use of captives and alternative risk financing options, to address their needs and to obtain the optimal outcome for them from the market.”
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