Global insurance prices continued to rise in the third quarter of 2012, continuing the slow but steady trend that began in the second half of 2011. According to the Marsh Risk Management Global Insurance Index, a composite of changes in insurance costs over a rolling 12-month period, prices across major lines of insurance increased by 0.9% in the third quarter.
By contrast, rates at renewal on average increased by 1.4% in the third quarter, the same level of increase at renewal seen in the second quarter. The figures, published in Marsh’s Global Insurance Market Quarterly Briefing, suggest that renewal rate changes, although varying across lines of business, may be stabilizing.
Andrew Chester, CEO of Bowring Marsh, commented: “While the global insurance market continues to be in a state of clear transition, the results for individual insureds vary significantly. With capacity and appetite for well-managed risk still strong, insureds are still able to achieve favorable results on renewal in many lines of business.”
Certain major lines of business saw hardening with financial and professional insurance rates rising by an average of 1.9% on renewal as the firming trend begun last year continued. Financial institutions in every major Eurozone country typically experienced increases in liability insurance rates as insurers tightened conditions.Property insurance rates stabilized as a lack of major losses from natural catastrophes so far this year kept increases to an average of 1.2% on renewal. Insureds with clean loss histories were more likely to experience flat renewals. Barring a significant natural catastrophe event, this trend is expected to continue, with flat renewals becoming more common by the end of the year. Casualty insurance rates globally rose on average by 1.2% on renewal in the quarter, higher than the 0.8% increase seen last quarter. Data on the US market showed that for the second quarter in a row, US companies were more likely to experience rate increases than decreases in major lines of insurance.