Broker launches quarterly global pricing index
Global insurance rates in the were 1.4% higher in the second quarter of 2012 than they were in the same period last year, a new Marsh price index has found.
However, the Marsh Risk Management Global Insurance Index also found that while rates had risen for four consecutive quarters, the Q2 2012 increase was less pronounced than those of the previous two quarters.
Marsh’s new index is comprised of client renewal data on property, casualty, and financial and professional lines of business, weighted by premium placed, taken from 20 large economies across all continents.
According to Marsh specialists, the increase in property insurance rates is being driven by unexpected adverse loss developments from last year’s major catastrophes, an increased focus by insurers on the quality of data provided by insureds, a rise in attritional losses, and changes to the way insurers are calculating their risk-adjusted cost of capital.
While the index shows that insurance rates for financial and professional lines declined slightly after rising during the previous two quarters, the overall trend suggests that the multiyear slide in liability insurance rates is coming to an end.
Commenting on the launch of the new index, Marsh global analytics head Claude Yoder said: “With the global insurance market now clearly in a state of transition, understanding market trends is vital for insureds making business-critical decisions about their future risk management strategies. This pioneering approach to measuring global rate movement is just one way Marsh uses analytics to support clients as they plan their insurance programmes.”