Marsh, the world’s leading insurance broker and risk management expert, released the “Global Insurance Market Index Report”. According to the report, in the third quarter of 2020, global business insurance prices rose by 20%. This is the largest year-on-year increase in insurance prices since the creation of the Marsh Global Insurance Market Index in 2012. In the second quarter of 2020, the average global business insurance price rose by 19%, while the increase in the first quarter of 2020 was 14%.
The 20% increase of average global business insurance price in the third quarter was mainly driven by property insurance, financial and professional liability insurance.
From a global perspective, property insurance prices rose by an average of 21%, and financial and professional liability insurance prices increased by an average of 40%, both of which were higher than the second quarter. Liability insurance prices rose by an average of 6%, slightly lower than the 7% in the second quarter.
In the third quarter of 2020, comprehensive insurance prices in all regions of the world increased for the eighth consecutive quarter. Except for Latin America (9%), insurance prices in all other regions of the world have reached double-digit increases, with the UK having the highest (34%), followed by the Pacific (33%) and the United States (18%). The price increase in all regions in this quarter was not lower than that in the second quarter.
The price of directors and officers liability insurance of listed companies continued to rise sharply. The price of D&O insurance in the UK and Australia increased by more than 100%, while the increase in the US was close to 60%. More than 90% of US-listed D&O insurance clients have experienced price increases.
Regarding the content of the report, Lucy Clarke, President of Marsh-Jardine’s professional risk business segment and Marsh Global Insurance Ranking, said: “The insurance market is still full of challenges. Uncertainties, especially those caused by the covid-19 epidemic, together with the poor loss records of many types of insurance have led to the continuous increase in insurance costs in the past three years. For customers, this situation occurred when they were most vulnerable. And many companies had to reconsider their insurance purchase models, including increasing self-retention, lower limit levels, and modification of policy terms and conditions. We expect these challenges to continue until 2021, and we will do our best to bring the best results to customers in this market environment.”
