Global commercial insurance pricing up 18% in first quarter of 2021, Asia insurance pricing increased 8% year-over-year.

A proprietary measure of global commercial insurance premium pricing change at renewal, representing the world's major insurance markets and comprising nearly 90% of Marsh's premium. The quarter is the first to show a fall in the average rate of increase since the index reported the first rise in global rates in Q4 2017. It follows year-on-year average increases of 22% in the fourth quarter and 20% in the third quarter of 2020.

According to the index, increases across geographies moderated due to generally slower rate rises in property insurance and financial and professional lines. The UK, with a composite pricing increase of 35% (down from 44% in Q4 2020) and the Pacific region, with a 29% increase (down from 35% in Q4 2020) drove the global composite rate. The rate of increase in the US was 14% (down from 17%), in Pacific 29% (down from 35%), in Asia 8% (down from 11%), and in Latin America and the Caribbean 5% (down from 9%).

Among other findings, the survey noted

• Global property insurance pricing was up 15% on average, down from the 20% increase in the fourth quarter 2020; casualty pricing was up 6% on average, compared to a 7% increase in the prior quarter.
• Pricing in financial and professional lines had the highest rate of increase across the major insurance product categories, at 40%, compared to 45% in the previous quarter.
• Cyber insurance pricing diverged from the trend, with prices increasing in the first quarter by 35% in the US and 29% in the UK, driven by a rise in the frequency and severity of losses. In the previous quarter, cyber rates were 17% in the US and 26% in the UK.

As in other regions, pricing in Asia was driven by property insurance and financial and professional lines.

Property insurance pricing across Asia rose 10%, a moderation from the 16% increase in the fourth quarter of 2020.

• For clients across the region, the degree to which they engage international capacity broadly determined renewal outcomes, with sharper price increases coming from a greater reliance on international capacity.
• Clients with significant catastrophe (CAT) exposures and those requiring international capacity continued to experience pricing increases, albeit the pace of change slowed in the first quarter.
• Strikes, riots, and civil commotions (SRCC) coverage has been all but removed from property policies in Hong Kong; coverage is available in the standalone political violence or terrorism markets.

Casualty insurance pricing in Asia remained generally flat, as it has for more than three years.

• Japan, Korea, and other countries experienced pricing challenges at renewal related to product recall-driven losses, combined with reduced insurer appetite.

Financial and professional lines pricing across Asia rose 23%, the largest increase observed in several years and the eighth consecutive quarter of increase.

• The cyber insurance market in Asia faced considerable upward pressure on rates and deductibles, with a reduction in capacity and narrowing of key coverages. The premium increase was up to 50%, on average, across all industries, as underwriters are scrutinizing risks due to market concerns with ransomware and overall aggregation.
• Vietnam remains a challenging market, with average increases of 15% in rates and deductibles. 
• Philippines experienced a reduction in capacity, increased deductibles and premiums, and difficult discussions regarding exclusions, extensions, and a longer turnaround on claims.
• India experienced a major rate of increase in technology professional indemnity insurance premiums — 25% on average and 100% for accounts with claims.
• The financial and professional lines market in Japan did not change significantly since the fourth quarter of 2020, with the exception of the cyber market.