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According to the latest Marsh Global Insurance Market Index, the second quarter of 2017 was the seventeenth consecutive quarter in which commercial insurance rates declined.
Marsh said that on average insurance rates continued to decline globally in the second quarter of 2017 across property, casualty, and financial and professional lines.
Looking at the figures in more detail, for global casualty lines the rate of decline was higher in the second quarter than the first, largely driven by stronger declines in US casualty pricing. Only the Pacific region showed an increase in average pricing.
Marsh said that competitive global commercial insurance prices helped produce a combined ratio for the industry that was above 100 percent at the end of 2016 for the first time since 2012. Figures from AM Best for the first quarter of 2017, however, show the combined ratio dropping slightly below 100 percent.
According to the index, in the second quarter of 2017, the US composite insurance rate decline was higher than the overall global rate. This represents a change from the first quarter and was driven largely by casualty lines, which declined 2.3 percent, on average, after having risen by 0.4 percent in the first quarter. The change in casualty lines was largely due to an increase in the average rate of decline in workers’ compensation pricing and a smaller, continuing increase in average auto liability pricing. General liability renewal rates also declined in the second quarter after posting a slight increase in the previous quarter.
US cyber insurance rates decreased in 1.5 percent, on average, in the second quarter of 2017, the first time since 2012 that average cyber rates declined for two consecutive quarters. One contributing factor to the rate movement for cyber is the increase in capacity due to the expansion of risk appetite from existing cyber markets, and the entrance of new insurers into this product area.
Marsh Global Insurance Market Index, Commercial insurance, Global