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Average insurance pricing in the United States decreased by nearly half a percentage point in during this year’s third quarter, reversing a trend toward flat pricing, said Marsh LLC in a report issued Wednesday.
Average property rates increased 3.1%, which was the fourth consecutive quarter of low-single digit increases following 2017’s catastrophes, according to the Global Insurance Market Index report for the third quarter of 2018.
Catastrophe-exposed risk and large-layered programs drove much of the increases in pricing, with 4% to 5% increases on average, according to the report.
However, the report said the impact of the property rate increase on the U.S. composite index was moderated by continued declines in casualty lines, primarily workers compensation and general liability.
Nearly half of workers comp and general liability programs experienced price decreases because of reduced claims frequency and a competitive pricing environment, respectively.
Financial and professional lines pricing rose 1% on average, largely because of increases in public company directors and officers coverage, which has been impacted by recent litigation activity and less aggressive insurer behavior, according to the report.
The report said U.S. cyber insurance prices decreased by 1.5% in the quarter, and while cyber pricing has fluctuated in the last five quarters, it has done so within a relatively narrow range. Meanwhile, competition in cyber continues across all revenue segments and industry sectors, and business interruption has become a pre-eminent cyber risk.
Globally, commercial insurance prices increased on average by more than a percentage point during the third quarter, driven by property and financial and professional lines, according to the report.
Overall, the market has remained stable, with pricing fluctuating within a relatively narrow range across most products and geographical areas.
The report said property risks increased by more than 3% on average; financial and professional pricing increased 3.3% on average for the second consecutive quarter; and average casualty prices declined nearly 2%.
U.S. commercial insurance prices increased modestly in the first quarter, according to a Willis Towers Watson P.L.C. report released on Monday.