Home / Local / 'Major' D&O, PI claims pushing up financial lines rates: Marsh
10 May 2021
Financial and professional (Finpro) rates in the Australia-led Pacific region surged 48% in the first quarter, the highest out of three commercial product classes tracked by Marsh’s price tracker.
Property went up 20% and casualty 17%, according to the broker’s Global Insurance Market Index.
Marsh says the Finpro market remains challenging as all major lines - directors’ & officers’ (D&O), professional indemnity (PI), and financial institutions - experienced reduced insurer appetite.
“Financial and professional lines pricing rose 48% in the Pacific, where the market has been impacted by major claims for listed company D&O and professional indemnity,” Marsh Head of Global Placement Asia Pacific John Donnelly told insuranceNEWS.com.au.
“In the listed company D&O space, there have been positive signs with pricing increases starting to moderate and the current rating environment has seen new capacity emerging in the London market.
“However, significant premium increases are still evident for several professions in the professional indemnity classes.
“Cyber insurance pricing is also increasing, driven by a rise in the frequency and severity of losses.”
Pacific pricing on the whole rose 29% on average in the three months to March, slower than the 35% increase in the prior December quarter.
Mr Donnelly says the weaker pace of increases possibly “marks a turning point in the longstanding upward trend we have seen over the last several years”.
Globally rates went up 18%, down from the 22% surge seen in the December quarter, with all six geographic regions covered by the index seeing lower price increases.
The UK recorded the steepest increase of 35% during the first quarter, compared with 44% in the previous December quarter, followed by the Pacific region where Australia is the largest market.
US prices advanced 14% (versus 17% in December quarter), Continental Europe 13% (versus 14%), Asia 8% (versus 11%) and Latin America 5% (versus 9%).
“Although we will continue to see price increases in some lines and the market overall will remain challenging for our clients, we expect price increases to continue to moderate throughout the rest of the year,” Marsh Specialty and Global Placement President Lucy Clarke said.
Finpro pricing surged 40%, the biggest out of the three product categories tracked by the index. Property grew 15% and casualty 6%.
Click here to access the report.