Global commercial insurance rates saw an increase of 13 per cent in the fourth quarter of 2021, indicating a continued trend of moderating rate increases, according to Marsh’s Global Insurance Market Index. The insurance broker and risk advisory firm notes that this is the 17th consecutive quarter of rate increases, although moderation began across many lines of businesses and geographies in Q1 2021. Marsh says that moderation across most regions is attributable to a slower rate of increase in property insurance, as well as directors and officers liability. For example, the UK saw a composite pricing increase of 22 per cent (down from 27 per cent in Q3), while the US saw a steady increase of 14 per cent. In addition, pricing in financial and professional lines again experienced the highest rate of increase (31 per cent) across major insurance product categories, driven by cyber. The increase in cyber insurance rates (130 per cent in the US, compared to 96 per cent in Q3) is predominantly attributable to the continued increase in the frequency and severity of ransomware claims, which has caused many insurers to have stricter coverage terms and conditions. Lucy Clarke, president of Marsh Specialty and Marsh Global Placement, comments: “We are operating in a challenging risk and insurance market, and will continue to focus on developing solutions in classes such as cyber, which will continue to be difficult for both clients and insurers. More broadly, however, we expect continued moderation in rate increases through 2022, a trend which will be welcomed by our clients.” Rate increases are an indication of a hard market, which pushes companies to consider alternative risk transfer and financing, such as captives, as documented in Marsh Captive Solutions’ annual Captive Landscape Report.
