Asia’s insurance pricing ‘flat’, cyber coverage demand rise in Q2

Globally, insurance pricing went up 3%.

The world’s commercial insurance pricing climbed 3% in the second quarter of the year, whilst Asia maintained an unchanged pricing, according to Marsh.

In the second quarter Global Insurance Market Index report by Marsh, this quarter marked the 23rd consecutive period in which composite pricing climbed.

In the first quarter, global pricing went up 4%, whilst the second quarter last year saw a 9% increase.

Composite pricing remained relatively consistent across regions, with the primary drivers being rate decreases for financial and professional lines. 

Cyber insurance saw either decreases or moderate increases. However, property insurance experienced the largest increases among major product lines.

Globally, the increase in cyber insurance pricing moderated to 1% in the current quarter, showing a significant decline from the 11% increase in the previous quarter and a substantial drop from the 28% increase seen in the fourth quarter of 2022.

Asia pricing: flat

In the first quarter of the year, insurance pricing in Asia remained flat compared to a 1% increment in the previous quarter. Property insurance pricing inched up by 2%, consistent with the trend of the prior five quarters. 

However, higher-risk industries and those with adverse loss experience or catastrophe exposure faced challenges.

Casualty insurance pricing dropped by 3% during the quarter, showing a larger decline compared to the 2% decline in the first quarter. Abundant capacity domestically and internationally led to significant competition, resulting in stable or reduced pricing. 

Workers' compensation and auto liability pricing were particularly competitive in Asia.

Financial and professional lines pricing slid 5% in the quarter, after being flat in the prior quarter. 

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Directors and Officers (D&O) rates continued to fall, with double-digit decreases being more common. Increased appetite and capacity were available for US-listed companies, leading to improved pricing and reduced retention. 

Premium reductions were also experienced in lines like D&O and professional indemnity within the financial institution space.

Cyber insurance pricing went up by 8% in the quarter, unchanged from the previous quarter, mainly due to new market entrants increasing competition. Some industry segments, such as telecommunications, saw continued increases in cyber insurance pricing. 

Ransomware remained a top concern for insurers, although claims frequency declined. 

Insurers' demands for more detailed submission information led to risk improvement and greater clarity of some companies' cyber exposures. 

Additionally, there was demand for cyber coverage for first-time buyers, driven mainly by newly implemented privacy regulations in territories like Vietnam.