Global insurance rates continued to firm on average in the first quarter of 2013, following a trend established over the previous 18 months, according to figures released in Marsh's latest Global Insurance Market Quarterly Briefing. In the US, most major insurance lines saw rate increases of 2% to 4%. Outside the US, rates overall decreased by an average of approximately 1%.
According to the Marsh Risk Management Global Insurance Index, which represents a composite or weighted average of rate change activity over the preceding four quarters, this is the fifth consecutive quarter of a global average rate increases. During the first quarter, the index - which was based at 100.0 in the second quarter of 2012 - rose by 0.1 points to 101.3.
Overall, rates renewed with an increase of 0.3% in the first quarter of 2013, following an increase of 1.2% in the fourth quarter of 2012. Global property rate typically declined on renewal during the quarter by 0.2%, while financial and professional lines generally increased by 0.8% on renewal and casualty insurance renewed up 0.7%. For liability insurance, financial institutions in the Eurozone continue to face increases while rates generally declined in other major classes of business.
Underlying these market conditions are very strong capacity and increased support for business among some global insurers for both catastrophe- and non-catastrophe-exposed property risks
In the US Northeast, property rates rose and insurers restricted coverage for flood-exposed properties following October's Superstorm Sandy. Outside the US, first-quarter property rates were down slightly overall from the first quarter last year.
Dean Klisura, Marsh's US Risk Practices and Specialties leader, said: "While rates continue to rise, insurers have a healthy appetite for business and this is making conditions progressively more favorable for insurance buyers. Underlying this trend are both strong capacity and increased interest from many global insurers."