Asia’s Q3’23 insurance pricing flat for the second quarter in a row

Overall pricing for the third quarter remained flat, similar to the previous quarter.

In the third quarter, insurance pricing in Asia remained unchanged compared to the previous quarter. 

According to a Marsh report, property insurance pricing saw a consistent 2% increase over the past six quarters, with some countries like China and Korea witnessing minor pricing decreases offset by increases due to catastrophe exposure in the region.

Whilst most domestic insurers reported profitability in their first-half results for 2023, some remained cautious due to the recent extreme weather patterns in North Asia during the late third quarter. 

Clients in catastrophe-prone areas faced heightened scrutiny from insurers.

Casualty insurance pricing, on the other hand, declined by 2% for the fourth consecutive quarter. This decline was attributed to ample capacity, competition between international and local companies, and reduced turnover for many insureds. 

Casualty insurers paid close attention to their exposure to the US market, particularly regarding large awards and settlements. Rates for workers' compensation and auto liability were competitive across various countries.

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In the financial and professional lines sector, pricing declined by 3% during the quarter, following a 5% decrease in the previous quarter.

Directors and Officers (D&O) rates continued to decline, with significant reductions in several countries. Increased appetite and capacity from local markets for US-listed companies led to pricing competition and, in many cases, reduced rates. 

The financial institution sector witnessed stable pricing with improved terms and coverages offered by insurers.

Cyber insurance pricing remained unchanged in the quarter after an 8% increase in the previous quarter. This stability was attributed to a growing risk appetite and capacity in the market. Underwriters continued to focus on cybersecurity controls, with particular attention to areas like war perils due to ongoing geopolitical tensions. 

Ransomware severity and the sophistication of malicious actors continued to rise, with data encryption and business interruption being the most significant contributors to losses.