Insurance pricing in the third quarter in Asia was flat, the same as in the prior quarter, according to the latest Marsh Global Insurance Market Index.
In its report titled “Global insurance market index Q3 2023 - Pricing continues to stabilize; property line remains challenging”, the world’s biggest insurance broker, Marsh, makes the following comments about pricing in Asia:
Property insurance pricing rose 2%, the same as in the prior six quarters.
• Some countries, including China and Korea, experienced small pricing decreases, which were offset by pricing increases related to CAT exposure in the region.
• While most domestic insurers demonstrated a return to profitability in their 1H2023 results, some remain cautious regarding the remainder of the year, given North Asia’s recent experience with strong weather patterns late in the third quarter.
• Clients in CAT-exposed geographies faced greater scrutiny from insurers.
• While inflation continued to ease from the peaks of 2022, insurers remained vigilant on the impact on their portfolios and maintained requests for updated valuations.
Casualty insurance pricing fell by 2% in the quarter, the fourth consecutive quarter of decline.
• Pricing reflected abundant capacity and in-country competition between international and local companies, as well as decreased turnover for many insureds.
• Casualty insurers continued to scrutinize US exposure due to the size of awards and settlements.
• Workers’ compensation and auto liability rates were typically competitive across the region, with pricing decreases experienced in several countries.
• Issues at top of mind for insurers included per- and poly-fluoroalkyl substances (PFAs); bushfire liability, particularly as the El Niño weather cycle begins; product recall; North American exposure; and the claims inflation environment.
Financial and professional lines pricing declined 3% in the quarter, after declining 5% in the prior quarter.
• D&O rates continued to generally decline, with double-digit decreases in several countries.
• There was increased appetite and capacity available from local markets for US-listed companies, resulting in pricing competition and in many instances, reduced rates.
• Pricing was stable for the financial institution sector, with improved terms and coverages offered by insurers in many cases.
Cyber insurance pricing was flat in the quarter, following an 8% increase in the prior quarter.
• Cyber rates stabilized as the market’s risk appetite and capacity increased.
• Underwriters continued to focus on cybersecurity controls; some coverage areas continued to face greater scrutiny, especially regarding war perils, given current geopolitical tensions.
• Ransomware severity and the sophistication of bad actors continued to increase.
• Data encryption and business interruption were the most impactful loss drivers.
Globally, commercial insurance pricing rose by 3% in the third quarter of 2023, the same as in the prior quarter, according to the report. This was the 24th consecutive quarter in which composite pricing rose, continuing the longest run of increases since the inception of the index in 2012. Increases peaked at 22% in the fourth quarter of 2020.
Regionally, composite pricing for the third quarter was as follows
Latin America and the Caribbean: +10%
India, Middle East, and Africa: +3%