UK market hardening picks up pace in second quarter

The rate of commercial insurance premium price rises picked up significantly in the second quarter of the year.

This is according to Marsh’s Global Insurance Market Index for 2019 Q2, which showed UK premium prices rose by 6.3% year-over-year.

This was above the global average reported by Marsh of 5.8%, and up significantly on the UK price rises seen in Q1 of this year of 2.9%. 

The rise was driven primarily by financial and professional liability. Here premiums rose by 15%, well above the 6.7% price rises reported in the class over the previous three quarters.

Marsh said it had seen price increases in the class ranging between 5% and 50% during the quarter.

It said most large non-US listed clients generally saw increases from 30% to 100%, a trend Marsh said it expected to see continue through the rest of the year. But it said there was some variability by segment, with larger organisations seeing greater increase.

It put the 15% rise down to a market-wide deterioration in claims developments, and few new market entrants.

Property and Casualty

In UK property Marsh reported price increases of 3.5%, as it said some insurers are now more willing to walk away from major renewals, reducing competition. In UK casualty it reported premium prices dropping by 1.0%.

The data is based on premium pricing change at renewal from 90% of Marsh’s premium.

The rise reported for 2019 Q1 had previously been the steepest increase since Marsh first started seeing slight price rises in the UK, from Q4 2017 onwards.

Between Q4 2017 and Q2 2018 Marsh had reported UK price rises of less than 1%. In Q3 2018 prices increased by 1.9%, and Q4 2018 by 1.0%.