Global commercial insurance pricing increases in fourth quarter of 2018

Global commercial insurance pricing continued to climb all throughout 2018. It increased, on average, by 2% in the fourth quarter of 2018, marking the fifth consecutive quarter of increases.

According to the Marsh Global Insurance Market Index, a proprietary measure of global commercial insurance premium pricing change at renewal, the increase was largely driven by property and financial and professional lines of coverage.

Pricing for property risks increased by more than 3.5%, which is generally in line with the previous four quarters. Financial and professional liability pricing continued to accelerate, increasing on average by 4.7%.

Related: Commercial insurance pricing increased slightly in Q3 2018

Pricing by region

The commercial insurance market in certain regions excelled compared to others.

In the United States:

• Insurance pricing in the fourth quarter of 2018 increased by 0.4%.
• Casualty pricing declined by 2% and has now decreased in all but one quarter since 2014.
• Public company D&O pricing increased by 3.4%, with increases observed on 65% of accounts.

In the United Kingdom:

• Overall insurance pricing in the fourth quarter of 2018 increased by 1.0%, the fifth straight quarterly increase.
• Casualty pricing declined by 3.1% overall, the fourth consecutive quarter of declines.
• Professional indemnity and cyber coverage pricing generally ranged from flat to increases of 10%.

In continental Europe:

• Insurance pricing in the fourth quarter of 2018 increased by 1.5% year-over-year, the region’s first quarterly composite price increase since 2013.
• Casualty pricing declined by 0.3% overall, but some lines reported (auto/motor) minor increases.

In Latin America:

• Overall insurance pricing in the fourth quarter increased by 1.4% in the Latin America and the Caribbean (LAC) region.
• Casualty prices in LAC increased by 2.2%, due primarily to motor lines which have seen increases as a result of greater claims frequency/severity and currency devaluations.

In Asia:

• Insurance pricing in the fourth quarter increased by 0.4% year-over-year, the first increase in composite prices since late 2014.
• Casualty pricing declined 0.5% in Asia, continuing to moderate towards a flat or stable price change, a trend that started in late 2017.

In the Pacific region:

• Overall insurance pricing in the fourth quarter of 2018 increased by 16%, continuing a trend dating back to 2016.
• Pricing for both CAT and non-CAT risks rose in Australia and New Zealand, with many increases greater than 10%.
• Financial and professional liability pricing increased more than 20%, continuing a string of double-digit increases observed over the last six quarters. Pricing (and deductibles) increased substantially, with D&O and financial institution pricing increased by as much as 30% on some risks in both Australia and New Zealand.

Related: 2019 forecast predicts strong growth for independent agents, brokers