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Business insurance : rate increase for a third consecutive quarter

by

Justine Montminy

August 20, 2018 11:30

Photo : Freepik

According to the Marsh Global Insurance Market Index, the rates insurance companies have increased globally in the second quarter of 2018, and this, for a third consecutive quarter. Marsh attributes this increase to the rate increases in property insurance and the business segment and financial.

The rate of business market segments, including financial services such as accountants, lawyers and notaries, have also increased by an average of 3.3 % for the third consecutive quarter. The rate for property insurance increased by 2.3 %, but those in the liability insurance decreased by 1.4% during the last quarter.

Rate increases in D & O

The american companies have experienced an increase in rates and insurance of directors and officers (also known as D & O) of companies listed on the stock exchange. More than 30 % of these companies have seen their police increase upon renewal in the second quarter of 2018, reports Marsh.

According to the firm credit rating Fitch Ratings, the increase can be explained by poor technical results, the worst since 2011. A little earlier this year, the company ratings A. M. Best had made the same observation, indicating that the D & O insurance was not profitable for u.s. insurers.

A minority of customers are increase in cyber

According to the report, the rate of insurance against cyber risks have increased 2.1 % in the United States. This is the third increase of the segment in the last eight quarters.

The rate increase was caused by a minority of customers, says the firm. Several have received an increase in their premium of at least a dozen points due to an increased exposure to risk, or because they have increased their coverage limit.

Marsh, however, indicates that the insurance against cyber risks continues to be an evolving market. The strong competition between insurers in all segments of this market has partially counteracted the increase in demand.

Property insurance is influenced by the disasters of 2017

According to Marsh, the insurers are still affected by the disaster of 2017. The rate for insurance of property have increased overall by 2.3% on average. This increase is lower than that of the two previous quarters, which were, respectively, 2.7 % and 3.2 %.

Marsh adds that the segment of insurance of property is greatly influenced by the geographical position of the country and classes of risk. The United States and Australia have experienced increases in rates, while continental Europe, Latin America, the United Kingdom and Asia have seen rates go down.

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