Financial and professional lines pricing moderates
Insurance pricing in the second quarter of 2022 in the UK increased 11%, compared to 20% in the first quarter.
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Property insurance pricing rates increased 6%, compared to 9% in the first quarter.
- Pricing was most challenging for clients with natural catastrophe (CAT) exposures and those in the food, waste, warehousing, and chemical industries.
- There has been a noticeable absence of major CAT losses this year.
- More clients with low/medium hazard risks experienced rate reductions.
- Some insurers sought to offset challenging exposures by packaging property coverage with motor and casualty.
- Underwriters demonstrated concern regarding valuation, putting focus on property damage and business interruption estimates.
Casualty insurance pricing increased 4%, compared to a 3% increase in the prior quarter.
- Electric vehicles impacted the automobile liability insurance market, with leading insurers saying that damage repair costs for EVs run approximately 25% higher than for internal combustion vehicles.
- Employers’ liability insurance pricing increased by 4%, compared to 3% in the prior quarter, driven by poor claims performance among some insureds.
- US exposure remained a challenge.
Financial and professional lines pricing experienced a decline in some products, although the overall average rate increased due to the impact of continued increases in cyber insurance.
- D&O pricing declined in the single digits in the second quarter.
- The D&O market experienced substantial rate decreases on larger multinational accounts.
- Midsize and smaller companies continued to experience rate increases or flat renewals.
- The cyber insurance market continued to be challenging, although the rate of increase moderated to 68%, compared to 102% in the first quarter.
- Some insureds continued to experience increases in the triple digits.
- Pricing for financial institutions (FIs) continued to moderate as insurer competition increased.
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Asia pricing
Insurance pricing in the first quarter in Asia increased 1%, compared to 2% in the prior quarter.