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U.S. commercial insurance prices increased by 10.4% in the fourth quarter of 2019, and rates globally also saw sizable average increases, according to Marsh LLC’s latest pricing report released Tuesday.
The increase in year-over-year pricing in the U.S. marks an acceleration in rate hikes since average prices began increasing in the fourth quarter of 2018 and an uptick over the 6.4% increase in U.S. pricing in the third quarter of 2019.
Increases varied significantly by line, with property rates rising 18.2% in the fourth quarter, the highest level since the survey began in 2012, and average casualty rates inching up 2.2%.
“Much of the overall casualty pricing increase was driven by the excess liability market, where prices increased nearly 10%,” the report said.
Auto liability rates, which increased 5%, also drove average casualty rates up, but workers compensation pricing fell 4% in the fourth quarter, the report said.
Financial and professional liability insurance rates in the U.S. increased 15.2% in the fourth quarter, driven by a more than 20% increase in directors and officers liability rates, the report said.
“Pricing continues to be impacted by increased litigation, with event-driven lawsuits in areas such as #MeToo, cyber breaches, social media, and safety,” the report said.
Cyber liability insurance rates increased 3% in the quarter.
International insurance markets also saw increases, with a global average rate increase of 10.6% in the fourth quarter of 2019 compared with 8.3% in the third quarter, the report said.
In the United Kingdom, average insurance rates rose 13.7% in the quarter, with financial and professional liability pricing leading the increases at 27.8%.
“Commercial D&O and financial institutions with a U.S. or Australian listing saw the largest pricing increases,” the report said.
Average U.K. property insurance prices increased 7.8% in the quarter, and casualty rates rose 2.7%.
In Continental Europe, prices increased at a slower clip, with an average composite rate increase of 6.6% in the fourth quarter, compared with 4.2% in the third quarter. Property insurance rates rose 10.3%, financial and professional liability rates increased 4.9%, and casualty rates were up 2.7%.
In Asia, the average price increase was 5.6%, led by property at 7.5%, the report said. In Latin America, average prices increased 7.1%, led by financial and professional liability at 15.3% and property at 9.4%.