Asia: Composite insurance price grows slightly in 4Q2022, while cyber insurance premiums skyrocket.

According to the "Global Insurance Market Index" report for the fourth quarter of 2022, which was released yesterday by Marsh, a leading global insurance broker, insurance prices in Asia increased by 2%, which was the same as in the previous quarter.

With rates of increases in Asia composite insurance pricing of 3% in both the first and second quarters, the year's lowest growth rate occurred. In 2022, the rates of increases in prices in Asia trailed those in commercial insurance prices globally. In the first quarter, the global increases were 11%; 9% in 2Q; 6% in the third quarter and 4% in the fourth. When compared to other regions of the world, Asia experienced the lowest overall increase in insurance pricing for 2022. 

The following is a summary of the pricing situation in Asia in 4Q2022:

Pricing for property insurance increased by the same 2% rate as the third quarter.

Insurers remained focused on accurate, up-to-date asset valuations and business interruption calculations as inflation worries persisted.

The CAT and secondary CAT risks remained the primary focus for underwriters.

Clients were favored once more by the renewal results due to their excellent claim performance and effective risk management procedures.

In the fourth quarter, casualty insurance prices decreased by 1%.

The majority of industry segments saw decreases in casualty pricing in Asia during the fourth quarter; However, some individuals encountered tighter terms and conditions.

With capacity being secured from London subject to its pricing and conditions requirements, the market remained challenging for product recall and US-exposed product liability.

Pricing for workers' compensation and auto liability renewals remained stable or decreased in some regions.

Due to claims inflation caused by litigation trends and material cost increases, insurers continued to act cautiously.

Insurers continued to concentrate on updating policy language and ensuring that updated sanctions clauses and exclusions regarding cyber, terrorism, punitive damages, and contractual liability were implemented.

Pricing for professional and financial lines went up by 2%, down from 5% in the previous quarter.

D&O rates began to stabilize, with up to a 10% decrease in non-US-exposed businesses.

The market received more capacity; This, in conjunction with the low number of IPOs, SPACs, and deSPACs in 2022, led to intense competition for traditional risks.

For large and complex accounts, pricing began to moderate and was considered stable.

Pricing for cyber insurance went up by 22%, which is better than in previous quarters.

New entrants increased capacity, markets actively expressed a desire to expand their portfolios, and many clients were able to eliminate ransomware-related sub-limit and coinsurance requirements (usually for an additional premium) in the cyber market.

Clients in particular industries remained susceptible to industry-specific wholesale insurer appetite shifts.

Pricing increased above average as telecom clients experienced a decrease in appetite for cyber and technology E&O risk as a result of claims activity.

Nearly ninety percent of Marsh's premium is made up of the "Global Insurance Market Index," a proprietary measure of how global commercial insurance premium pricing changes at renewal. It represents the world's major insurance markets.

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