In the wake of a pandemic outbreak, every industry is going through major losses. Even the insurance industry is not left untouched. According to the recent Global Insurance Market Index announced by broker and risk advisor Marsh, a major hike has been observed. This is seen in the Global average Commercial Insurance prices. The prices have increased by 19% in the second quarter of 2020.
This is the highest rise in the pricing rates since the time (2012) Marsh has begun its commercial insurance rates survey. Other findings and conclusions drawn from the survey included that on average, global financial and professional lines and global casualty were up by 37% and 7% respectively.
Some regions like the U.S. (18%), Pacific (31%), UK (31%), and Continental Europe (15%) observed a large increment in pricing. This is believed to be influenced by increases in property and directors and officers (D&O) coverage. Further, the survey marked the large increment in certain D&O markets.
For example, in the U.S. D&O price rates for public companies were increased by 59%, and in the UK D&O insurance premiums observed hike. It was more than 100%. These Directors’ and Officers’ (D&O) insurance plans protect the company’s directors and executives against litigation costs.
On this note, Dean Klisura, President of Global Placement and Advisory at Marsh said that the pricing structure of the second quarter of 2020 was highly affected by the losses due to COVID-19. Along with it, other major losses conferred to overall pricing rates.
He added that as insurers stick to their work via property claims and D&O, and with rising effects of COVID-19, pricing pressure has been triggered for the remaining 2020.
