Average insurance prices in Australia jumped 8.2% in 2017

Risk managers and insurance buyers are on notice as Australia saw a fourth straight quarter of overall price increases.

According to new data from Marsh, the majority of the rises can be attributed to insurers’ continuing response to poor underwriting results across many products.

Financial and professional liability pricing rose nearly 16%, on average,  driven by the D&O market, which has seen a proliferation of Side C (entity) claims.

Casualty pricing has now increased, on average, for five consecutive quarters. Property pricing increased, on average, across both CAT and non-exposures, with some CAT risks up 20%.

All major lines within casualty had mid-to-high single-digit increases. 

Asia in focus

Average pricing decreased in Asia in Q4 2017; albeit at slower rates than what was observed in Q3.

Property pricing in the region showed a slight increase, on average, of 0.1%, but there was wide variability across the region (down 5% to up 10%, according to Marsh) depending on country and CAT versus non-CAT risks. 

Macau continues to show the largest property pricing increases as a result of Typhoon Hato’s August landfall. 

Casualty pricing decreased, on average, by1.3%, the slowest rate of decline in three years. General liability and workers’ compensation generally had single-digit decreases in many countries in the region. Conversely, auto/ motor prices were up slightly. 

Financial and professional liability had single-digit decreases.

The broker said overall capacity in the region “remains robust”. 

Global pricing

Average global insurance pricing increased for the first time since Q1 2013, driven largely by global property insurance pricing, which was affected by large catastrophe losses in the third quarter.

Average pricing increased by 0.8% in the quarter, compared to a decrease of 1.9% in Q3 2017.

Marsh President, Global Placement and Specialties, Dean Klisura, said: “Losses from Hurricanes Harvey, Irma, and Maria, and wildfires in California drove increases in property pricing in the US. Although property pricing generally increased, market capacity remains abundant.  Pricing in all global regions showed either a moderate increase in the fourth quarter, or a slowing of the pace of decrease.”