Insurance rates increase 0.9% in Q3

Global insurance prices increased 0.9% across all major lines of business in the third quarter of 2012, continuing the trend that began in the second half of 2011, according to Marsh’s latest report.

The Marsh Risk Management Global Insurance Index found that 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, which were published in Marsh’s Global Insurance Market Quarterly Briefing, suggest that renewal rate changes, although varying across lines of business, may be stabilising.

Bowring Marsh chief executive Andrew Chester said: “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 favourable results on renewal in many lines of business.”

The report found that some major lines of business hardened as financial and professional insurance rates rose by an average of 1.9% on renewal.

It said that financial institutions in every major eurozone country typically experienced increases in liability insurance rates as insurers tightened conditions.
Meanwhile, property insurance rates stabilised as a lack of major losses from natural catastrophes so far this year kept increases to an average of 1.2% on renewal.

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, American companies were more likely to experience rate increases than decreases in major lines of insurance.