INSIGHTS    MAY 2020

Global Insurance Prices Rise for Tenth

Consecutive Quarter
Global commercial insurance prices rose 14% in the first quarter of 2020, the tenth
consecutive quarter of price increases (see Figure 1). Although the COVID-19 global
pandemic had an insignificant impact on pricing in the first quarter, the reported
increase was the largest year-over-year increase in the Marsh Global Insurance Market
Index since its inception in 2012. We anticipate that COVID-19 will likely have an impact
on pricing for the balance of 2020.*

FIGURE Global Insurance Composite Pricing Change

1 SOURCE: MARSH GLOBAL ANALYTICS

14%

11%

8%

6%

3%
2% 2% 2%
1% 1%

-2% -2% -2%

-4% -3% -3% -3%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

*Note: All references to pricing and pricing movements in this report should be considered averages, unless otherwise noted. For ease of
reporting, all percentages regarding pricing movements have been rounded to the nearest whole number.
 FIGURE Global Composite Insurance Pricing Change — By Coverage Line
2 SOURCE: MARSH GLOBAL ANALYTICS

Global Property Global Casualty Global FinPro 26%

18%

15%
14%
13%

10% 10%
8%

5%
3%
2% 2%

Q2 19 Q3 19 Q4 19 Q1 20 Q2 19 Q3 19 Q4 19 Q1 20 Q2 19 Q3 19 Q4 19 Q1 20

The insurance market in the first quarter experienced pricing increases in many geographies and across multiple products (Figure 2 and
Figure 3). Globally in the first quarter:

•• Property insurance pricing increased 15%. •• Financial and professional liability rose 26%.

•• Casualty pricing increased 5%.

2 • Global Insurance Market Index Q1 2020

 FIGURE Composite Insurance Pricing Change — By Region
3 SOURCE: MARSH GLOBAL ANALYTICS

US UK Cont. Europe Latin America Asia Pacific

23%
21% 21%
19%
18%

14%
14%
12%
10%
7% 6%
7% 8% 6% 6%
6% 6% 5%
5% 5%
4% 4%

2%
1%

Q2 19 Q3 19 Q4 19 Q1 20 Q2 19 Q3 19 Q4 19 Q1 20 Q2 19 Q3 19 Q4 19 Q1 20 Q2 19 Q3 19 Q4 19 Q4 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 19 Q3 19 Q4 19 Q1 20

Composite pricing increased in all regions for the sixth consecutive quarter. Regional pricing increases in the first quarter of 2020 were
as follows:

•• US 14%. •• Latin America and the Caribbean 6%.

•• UK 21%. •• Asia 6%.

•• Continental Europe 8%. •• Pacific 23%.

Marsh • 3
 Pricing in US Property and Financial and Professional
Lines Increases Over 20%
Insurance pricing in the first quarter of 2020 in the US increased 14%, year-over-year (see
Figure 4). In addition to the overall pricing changes, the general trend in the quarter was
towards a firming of prices for the majority of coverages (see Figure 5).

FIGURE US Composite Insurance Pricing Change

4 SOURCE: MARSH GLOBAL ANALYTICS

14%
US 11% 14%
Global 10%
8%
6% 6%

5%

3%
2% 2% 2%
1% 1% 1%

-4% -3% -3% -3% -2% -2% -2% 0% 0% 0%

-1% -1%

-2%

-3% -3% -3% -3%

-3% -4%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Property pricing in the US has increased for 10 Casualty pricing in the US increased 5% in the quarter.
consecutive quarters.
•• The excess liability market drove much of the overall casualty
•• Property rates in the US increased 21% in the first quarter, the pricing movement, with average prices up 11%. Many risks
highest level recorded since the survey began in 2012. experienced significantly greater increases.

•• Both catastrophe and non-CAT property pricing showed •• Auto pricing was up 10%, with 80% of clients experiencing
similar increases. an increase.

•• Deal structure parameters (limits, deductibles, etc.) showed little •• Worker’s compensation pricing decreased 1%.
change from the prior quarter.

4 • Global Insurance Market Index Q1 2020

 FIGURE US Composite Insurance Pricing Change — By Major Coverage Line
5 SOURCE: MARSH GLOBAL ANALYTICS

21%
18%

13%

10%

4% 4% 4%
US Property

3% 3% 3%

-4% -4% -4% -4% -4%

-6% -5%
5%

2% 2%
US Casualty

1% 1%

0% 0%
-1% -1% -1% -1% -1% -1%
-2% -2% -2% -2% 23%

15%

11%

7%

3%
2%
1% 1%
US FinPro

0%

-1%
-2% -2% -2% -2% -2% -2%
-3%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Financial and professional liability insurance rates in the US •• Insurers continued to tighten terms and reduce capacity.
increased 23%, driven by directors and officers (D&O) pricing.
•• Among public D&O clients, 37% increased retentions, the highest
•• Pricing in the D&O market was up 44%, with 95% of clients percentage in several years.
experiencing an increase.
•• Cyber insurance pricing rose 6%, the largest increase since 2016.
•• Pricing was affected by heightened litigation, with traditional
securities lawsuits increasing in frequency and severity.

Marsh • 5
 UK Composite Pricing Rises for Tenth
Consecutive Quarter
Overall insurance pricing in the first quarter of 2020 in the UK increased 21%
(see Figures 6 and 7).
•• Casualty pricing increased 5%.

FIGURE UK Composite Insurance Pricing Change

6 SOURCE: MARSH GLOBAL ANALYTICS

21%

UK
14%
Global
12% 14%
11%

8%
6%

6%

3%
2% 2% 2%
1% 1% 3%
2%
1% 1%
1%
-4% -3% -3% -3% -2% -2% -2% 0%

-3%
-4%

-5% -5% -5% -5% -5%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Property pricing increased 10% in the quarter. Casualty pricing has now increased for three consecutive quarters,
following several years of single-digit decreases.
•• Pricing has increased five consecutive quarters, driven by a
reduction in capacity as insurers look to reduce their exposures •• General liability coverages generally showed the largest
on specific risks and across portfolios. increases, typically in the upper single-digit range.
•• Larger accounts generally experienced greater price increases •• Little variance was found between large and midsize accounts.
than did midsize clients.

6 • Global Insurance Market Index Q1 2020

 FIGURE UK Composite Insurance Pricing Change — By Major Coverage Line
7 SOURCE: MARSH GLOBAL ANALYTICS

10%
8%
6%

4%
3%
UK Property

1%
0%

-2% -1% -1%

-4%
-5% -5% -5% -5% -5% -5%

5%
4%
3%
UK Casualty

1%

-1% -1%
-2% -2% -2% -2%
-3% -3%
-4% -4% -4% -4%
-5% 46%

28%

23%

15%

7% 7% 7%
5%
3%
UK FinPro

1%

-3%
-5% -5% -5% -5% -5% -5%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Financial and professional liability pricing increased 46%. •• Significant reduction in available capacity has been lost
since 2017.
•• D&O pricing showed significant increases, with some large
accounts experiencing hikes of 100%. Generally, midsize •• We witnessed a greater adoption of policy restrictions, such as
accounts saw smaller increases, but still had prices up 50% insolvency exclusions, bribery and corruption exclusions, and
to 70%. more restricted discovery options across the market.

Marsh • 7
 Latin America Pricing Firms for Tenth Straight Quarter
Insurance pricing in the first quarter of 2020 in the Latin America and Caribbean (LAC)
region increased 6% (see Figures 8 and 9). The overall average composite pricing in LAC has
now increased for 10 consecutive quarters.

FIGURE Latin America Composite Insurance Pricing Change

8 SOURCE: MARSH GLOBAL ANALYTICS

LAC
Global
14%
11%

8% 7%
6% 6%

5%

3% 3%
2% 2% 2%
1% 1% 1% 2% 1%
1%
0% 0%
1%
-4% -3% -3% -3% -2% -2% -2%

-1% -1%

-2%

-3%
-4%

-6%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Property pricing in the region increased 9% in the first quarter. Casualty prices rose 2%.

•• Property pricing has increased for the last three quarters after •• Casualty pricing continued to be generally stable across the
declining or being stable for the prior five years. region, with relatively minor increases observed the last
several quarters.
•• Strikes, riots, and civil commotion (SRCC), primarily in Chile,
changed market appetite in 2019. •• Chile experienced the largest increases in casualty lines in LAC,
with increases in the mid-single digits.
•• Increased pricing was also observed in Colombia and Mexico.
•• Brazil continued to experience pricing decreases due to
competitive local capacity, particularly in general liability
and auto.

8 • Global Insurance Market Index Q1 2020

 FIGURE Latin America Composite Insurance Pricing Change — By Major Coverage Line
9 SOURCE: MARSH GLOBAL ANALYTICS

9% 9%

6%

3%
LAC Property

0% 0% 0%
0%
-1% -1%
-4% -4% -4% -4%
-5%
-6%
-7%

7%
6%
5%
4% 4%
3% 3% 3%
2% 2% 2% 2%
LAC Casualty

1% 1% 1%

-1%
-2%
15% 15%

8%
7%

3%
2% 2% 2% 2%
LAC FinPro

1% 1% 1%

0% 0% 0%
-2% -1%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Financial and professional liability pricing rose 8% in the quarter. •• Increases in financial and professional liability pricing centered on
FI and professional liability, with double-digit increases in Brazil,
•• Although pricing increased at a moderate rate in the first quarter, Colombia, and Mexico.
the increase was half of the rates observed in late 2019.

Marsh • 9
 Continental Europe Pricing Driven by Property and
Financial and Professional Lines
Insurance pricing in the first quarter of 2020 in Continental Europe (CE) increased 8% (see
Figures 10 and 11).

FIGURE Continental Europe Composite Insurance Pricing Change

10 SOURCE: MARSH GLOBAL ANALYTICS

CE
Global
14%
11%

8% 8%
6% 7%

4%
3%
2% 2% 2%
1% 1% 2% 2% 2%

-4% -3% -3% -3% -2% -2% -2%

-1% -1%

-2% -2%
-2%
-3% -3% -3%
-4% -4% -4%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Property insurance pricing in CE rose 9%, the sixth consecutive Casualty insurance pricing increased 4% in the quarter.
quarterly increase.
•• Casualty pricing has increased for three consecutive quarters,
•• Property pricing continued a steady rate of increase that started after several years of continuous (but minor) decreases.
in early 2019, after a multi-year period of flat or declining
pricing movement. •• General liability drove the overall pricing increase, with single-
digit increases in most countries.
•• Pricing for CAT and non-CAT risks increased in most countries,
generally in the range of low-single digits to 15%. •• Auto liability pricing was generally higher in most countries than
in previous quarters.

10 • Global Insurance Market Index Q1 2020

 FIGURE Continental Europe Composite Insurance Pricing Change — By Major Coverage Line
11 SOURCE: Q1 2019 GLOBAL INSURANCE MARKET INDEX

10%
9%
8%

4% 4%
3%
CE Property

0% 0%

-1% 0%
-2%
-3%
-5% -5%
-6% -6%

-9%

4%
3% 3%
1%
CE Casualty

0%
0% 0% 0%
-2% -2% -1% -1% 12%
-3% -3% -2%
-4% -4%

5%
2% 2%
1%
CE FinPro

1%

-2% -2% -2% -2% -2%

-3% -3% -3% -4% -3%
-5%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Financial and professional liability insurance pricing increased •• Most large countries reported high single-digit to 20% increases
12% in the quarter. for multiple financial and professional lines coverages.

•• The pricing increase was double the increase observed at the end
of 2019.

Marsh • 11
 Pacific Pricing Continues Upward Trend
Overall insurance pricing in the first quarter of 2020 in the Pacific region increased 23%,
continuing an upward trend that began in 2015 (see Figures 12 and 13).

FIGURE Pacific Composite Insurance Pricing Change

12 SOURCE: MARSH GLOBAL ANALYTICS

23%
Pacific 21%
Global 19%
18%
16% 16%
14% 14%
12%
10% 14%
11%

8% 8%
6%
6%

3%
2% 2% 2% 2%
1% 1%

-4% -3% -3% -3% -2% -2% -2%

-2% -2%
-3%
-4%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Property insurance pricing increased 23% in the quarter, the tenth Casualty pricing rose 8%.
consecutive quarter of year-over-year double-digit increases.
•• Casualty pricing has been increasing for three years.
•• Double-digit increases were reported for CAT and non-CAT risks
in both Australia and New Zealand. Pricing increases exceeded •• Competition in the casualty marketplace increased, but pricing
30% reported for many clients. continued to increase at a consistent rate.

•• Property increases were mainly driven by bushfires, severe •• Some risks are receiving increases ranging from 10% to 20%.
hailstorm damage, and flooding in December and January.

12 • Global Insurance Market Index Q1 2020

 FIGURE Pacific Composite Insurance Pricing Change — By Major Coverage Line
13 SOURCE: MARSH GLOBAL ANALYTICS

23%

18% 18% 18%

15% 15%
13% 13% 13%
10%
Pacific Property

8% 8%

0%

-3%
-5% -5% -5%
8%
6% 6% 6% 6% 6% 6% 6% 6% 6%
5%
Pacific Casualty

3% 3%
0% 0%

-1%
-3%
33% 33%

28% 28%
23% 23% 26% 26%
16% 15%
13%
7% 7%
Pacific FinPro

2% 2%

-2%
-3%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Financial and professional liability pricing rose more than 30% in •• Side C-exposed listed companies experienced the largest
the quarter, marking 11 straight quarters of double-digit increases. increases, oftentimes greater than 100%.

•• Conditions remained consistent with prior quarters.

Marsh • 13
 Asia Composite Pricing Continues to Increase
Insurance pricing in the first quarter of 2020 in Asia increased 6% year-over-year
(see Figures 14 and 15).

FIGURE Asia Composite Insurance Pricing Change

14 SOURCE: MARSH GLOBAL ANALYTICS

Asia 14%
Global 11%

8%
6% 6% 6%
5%

4%
3%
2% 2% 2%
1% 1%

-4% -3% -3% -3% -2% -2% -2% 0% 0% 0%

-1%
-1% -1%
-2%

-3% -3% -3% -3%

-5%
-6%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Property insurance pricing rose 8%. Casualty pricing was flat in the first quarter.

•• Property pricing in Asia has steadily increased over the last •• For an eighth consecutive quarter, casualty pricing was generally
five quarters. flat, following several years of moderate decreases.

•• Hong Kong and Singapore experienced double-digit increases in •• Slight increases in auto/motor liability in many Asian countries
both CAT and non-CAT exposures. were offset by minor decreases in general liability.

•• Lack of competition continued to be a factor for large and

complex property placements, driving pricing increases.

14 • Global Insurance Market Index Q1 2020

 FIGURE Asia Composite Insurance Pricing Change — By Major Coverage Line
15 SOURCE: MARSH GLOBAL ANALYTICS

8% 8%
7%

5%
Asia Property

0% 1% 1%
0% 0%
-1% -2% -2% -1% -1%
-3%
-5%
-6%
Asia Casualty

1% 0% 0%
0% 0% -0%
-1% -1% -1%
-3%
-4%
-5% -6% -5% -6% -6% -5% 8%

5% 5%
3%
Asia FinPro

0% 0%

-2% -1% -1%

-3% -3% -3%
-5% -5% -5%
-6% -6%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Financial and professional liability pricing rose 8%, the largest •• International insurers have reduced capacity, and held to
increase observed in several years and the fourth consecutive pricing increases.
quarter of increases.
•• Reduced appetite was seen from insurers to compete on FI,
•• Pricing increased in China, Hong Kong, India, Indonesia, Japan, especially on risks with claims or notification activity where
Korea, and Singapore for D&O, FI, and professional liability. pricing is firming.

Marsh • 15
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ASIA AND PACIFIC LATIN AMERICA US AND CANADA

JOHN DONNELLY PAULA LOPES CHRISTOPHER LANG
Placement Leader Placement Leader Placement Leader
+61 (2) 88647736 +55 (11) 35327286 +1 (212) 345 1204
[email protected] [email protected] [email protected]

CONTINENTAL EUROPE, UK AND IRELAND

MIDDLE EAST AND AFRICA ANDREW CHESTER BOWRING MARSH
NICK HOLMES Placement Leader TOM DAVIES
Placement Leader +44 (0)20 7357 3774 Global Wholesale Placement Leader
+44 (0)7711 083261 [email protected] +44 (0)20 7357 1030
[email protected] [email protected]

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