Advisen FPN

Advisen Front Page News - Wednesday, May 5, 2021

P/C price increases slow to 18% in first quarter, but cyber on the rise: Marsh


P/C price increases slow to 18% in first quarter, but cyber on the rise: Marsh

By Erin Ayers, Advisen

Commercial insurance prices rose an average 18% in the first quarter of 2021, marking a slowdown in pace from the 22% rise seen in the fourth quarter of 2020, according to Marsh’s Global Insurance Market Index.

The United Kingdom and Pacific regions saw the highest increases at 35% and 29%, pressing the global composite rate higher, Marsh reported. Prices in the United States and continental Europe showed lower average increases at 14% and 13%, respectively, while Asia and Latin America came in at 8% and 5%. All regions showed moderation in rate increases, with Marsh predicting a pricing plateau in the U.S.

New capacity has entered both the property and casualty markets, and will likely spark some competition, the broker said. Globally, property prices rose an average of 15%, down from 20% last quarter, and casualty prices rose 6%. Globally, financial and professional lines pricing dropped to 40% from 45%.

Notably, cyber insurance pricing bucked the trend and shot up in Q1, by an average of 35% in the U.S. and 29% in the U.K. For the U.S, this marked a doubling of the last quarter’s prices and the largest increase since 2015.

The cyber pricing environment stems directly from the increase in frequency and severity of ransomware attacks, according to Marsh.

“Most insurers scaled back limit deployment to a maximum of USD5 million to USD10 million for any one risk, and narrowed coverage for ransomware-related losses,” Marsh said in its report. “All industries have been affected, particularly health care, manufacturing, educational institutions, and public entities; many insurers have declined to quote risks in these industry classes.”

Cyber helped drive an overall average increase of 25% for financial and professional lines, but U.S. directors and officers liability rate hikes slowed significantly to 27% from 42% in Q4 2020. Fiduciary pricing stayed within the 30% to 40% increase range, mainly due to large increases on excess fees claims for some clients, Marsh said.

In the U.S., excess liability prices are still on the rise and will be through 2021, but at a manageable pace. Insurers continue to press for coverage restrictions on COVID-19, sexual abuse and molestation, traumatic brain injury, nitrosamines, and per- and polyfluoroalkyl substances (PFAS). General liability prices rose steadily in the single-digits due to the risk of high jury verdicts.

Property pricing increases in the U.S. slowed throughout the first quarter, for an average increase of 15%. Marsh said multi-layered programs were renewing at higher rates (a 22% average) than single-layer programs (at 12%).

“Rates appeared to be at, if not above, technical pricing levels. Some insurers were more assertive, and writing new business,” said Marsh in its report.

Editor Erin Ayers can be reached at

Safety National
St. John's University