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Global Insurance Market Update

UK Pricing Q3 2022

Insurance pricing in the third quarter of 2022 in the UK increased 7%, compared to 11% in the second quarter

25/10/2022 · 3 minute read

Financial and professional lines pricing flat

Insurance pricing in the third quarter of 2022 in the UK increased 7%, compared to 11% in the second quarter

Constant bar chart represents Global Insurance Composite Pricing Change.

Property insurance pricing increased 6% year-over-year, the same as in the second quarter.

  • Property insurance pricing continued to plateau, and was generally less volatile for clients.
    • Property insurance pricing remained competitive for low- to medium-hazard industries, and more challenging for higher hazard industries or risks with major loss activity and/ or a challenging occupancy or process, such as food production, warehousing, or waste recycling.
  • Insurers focused on claims inflation trends by increasing pricing if exposure bases were not, in their view, appropriately assessed.
  • As reinsurance treaty renewal season started, Hurricane Ian served underwriters in maintaining pricing discipline.

Casualty insurance pricing increased 4%, the same as in the second quarter.

  • Rates remained competitive for employers’ liability and public and product liability for clients considered to have attractive risks, despite inflationary pressure. 
    • Exclusionary language created challenges and was increasingly viewed as a competitive edge as clients chose an insurer.
    • Capacity was stable with risk management key to achieving favourable terms.
  • Inflation played a significant role in renewal discussions.
  • Electric vehicles continued to affect the auto liability insurance market, with leading insurers saying that damage repair costs are approximately 25% higher for EVs than for cars with internal combustion engines.
    • For example, in many cases battery packs need to be replaced following minor collisions.
    • EV repair specialists are currently in short supply; a limited number of garages have the knowledge and resources to carry out required repairs.

Financial and professional lines pricing was flat in the third quarter compared to average increases of 19% in the second quarter. Some products experienced a decline in rate.

  • D&O pricing typically declined in the 5% to 10% range, with substantial rate decreases for large, multinational clients.
  • For financial institutions (FIs), while the average rate increased, some clients experienced reductions of 5% to 10%.
  • Crime insurance capacity remained limited following the market’s abrupt contraction over the past two years, which saw many insurers withdraw altogether.

Cyber insurance pricing increased 66% in the third quarter, continuing the moderation trend of the past several months, as losses continued to improve.

  • The market experienced continued pricing stabilisation following a peak increase of 102% year-over-year in the first quarter of 2022.
  • Strict requirements from insurers regarding key cybersecurity controls continued to positively change underwriters’ views on cyber hygiene at the majority of insureds compared to 2021 and before.
  • We are cautious regarding the improvement in cyber insurance market conditions as other factors could compound the risk. For example, the Russia-Ukraine conflict may have temporarily paused ransomware attacks by disrupting the many cyber hackers based in the region.

Global Insurance Market Index – 2022 Q3

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Global Insurance Market Index

US Pricing

Insurance pricing in the third quarter of 2022 in the US increased by 5%, compared to 10% in the prior quarter
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Global Insurance Market Index

Latin America and Caribbean Pricing

Insurance pricing in the third quarter in the Latin America and Caribbean (LAC) region increased 5%, the same as in the prior quarter
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Global Insurance Market Index

Continental Europe Pricing

Insurance pricing in the third quarter of 2022 in Continental Europe (CE) increased 6%, the same rate of increase as in the prior two quarters
January 10, 2019. Sydney, Australia. Landscape aerial view of Sydney Opera house near Sydney business center around the harbour.

Global Insurance Market Index

Pacific Pricing

Insurance pricing in the Pacific region increased 5%, down from 7% in the prior quarter and the seventh consecutive quarterly reduction in rate increases
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Global Insurance Market Index

Asia Pricing

Insurance pricing in the third quarter of 2022 in Asia increased 2%, down from 3% in the prior two quarters