In an already hostile insurance pricing environment, Marsh’s Global Insurance Market Index has revealed that global insurance prices have risen 19% in the second quarter, marking an 11th consecutive quarter price hike, Insurance Business News reports.
The Q2 price hike is the largest year-over-year increase in the Marsh Global Insurance Market Index since its inception in 2012. The report cites the combined effects of social inflation pressures, persistently low yields and a number of large underwriting losses, including from COVID-19, as the moving forces behind the increases in price.
Commenting on the findings, Dean Klisura, President, Global Placement and Advisory at Marsh, said: “While pricing movements this quarter were impacted by losses related to COVID-19, other large losses contributed to overall pricing pressures. As insurers continue to work through claims in property and D&O, and with the full cost of COVID-19 still developing, upward pressure on pricing is anticipated for the balance of 2020.”
In the second quarter, the global insurance market experienced pricing increases across major product categories which saw financial aid and professional liability prices rise by 37%, property insurance prices increase by 19% and casualty pricing increase by 7%.
Australia, alongside the UK, was the country that experienced the greatest increase to insurance prices at 31% in Q2 2020. This marks an 8% increase in Australia from the Q1 2020 23% price hike.
The trajectory in Australian insurance prices sees a continuous upward trend that started in 2015. Wildfires and other CAT events are said to have driven the pricing increase, with concerns mounting around COVID-19 also having an impact.
Property insurance prices in Australia rose by 28% in the quarter, marking the 11th consecutive quarter of year-on-year double-digit increases. Casualty pricing rose by 9% in the region with a continued increase in the mid-single digits as it has for three years.
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Insurance Pricing Rises for The 11th Consecutive Quarter (Insurance Business Magazine)
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