Global commercial insurance pricing has increased for the ninth consecutive quarter in the fourth quarter of 2019, according to Marsh’s quarterly Global Insurance Market Index, representing the world’s major insurance markets and comprising nearly 90 per cent of Marsh’s premium.
The Pacific region had the largest composite pricing increase in the index of 21 per cent, a quarterly trend that has continued for three years. Pacific composite pricing was driven by increases in D&O rates, as well as increases in property.
The overall insurance pricing in the fourth quarter of 2019 in the Pacific region increased 20 per cent, continuing an upward trend that began in 2015. Casualty pricing rose 6 per cent, a trend of mid-single digit increases that has continued for three years. Competition in the casualty market increased, but pricing has continued to rise at a fairly consistent rate. Pricing for all sub-products for both Australia and New Zealand was either stable or increased in the low-to-high single digits.
Financial and professional liability pricing again rose more than 25 per cent in the quarter, marking 10 straight quarters of doubledigit increases. The largest increases are being experienced on side C exposed listed company D&O, where increases of 100 per cent or more have become common. Financial services professional indemnity (PI) has experienced increases of a similar magnitude.
In the D&O market, the driver for price change continues to be securities class action claims. Financial services PI pricing continues to be impacted by claims arising from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The claims environment has led to a number of major insurers in the local market retreating, with others taking firmer positions on price, capacity, and retentions.
A large volume of Australian business continues to be placed into the London market. You can access the full report here.