Insurance rates on the decline, save for one big outlier

There’s always at least one contrarian who likes messing with the overall vibe.

Commercial insurance rates largely declined in Q2, with an average decrease of 4% globally across most regions and business lines, according to insurance broker and risk management firm Marsh. Rates were flat in the US, following a 1% decrease in Q1.

But there was one exception. Pricing for casualty insurance—meaning, coverage against losses to third parties, like damages caused by a company vehicle or a product a company makes—increased 4% globally and 9% in the US. Excluding workers’ compensation, US casualty insurance rates increased 12%.

Why the big increases in casualty lines?

According to Marsh, Q2’s rising costs in the US were largely due to frequent and severe casualty claims in the US, many of which are linked to so-called “nuclear” jury awards. The property/casualty insurance industry defines a nuclear verdict as a disproportionately high jury award ($10 million or more) to plaintiffs who sue organizations.

“Casualty insurance trends are likely to continue for the foreseeable future, barring unanticipated changes in conditions,” John Donnelly, Marsh’ president of global placement, noted in the report.

Outside of casualty insurance, US companies enjoyed steady or falling rates for insurance products in Q2. Property rates decreased 9%, cyber rates decreased 3%, and financial and professional insurance rates were flat.

In summary? Renewals were probably not too bad overall. CFOs likely let out a sigh of relief upon renewing their policies in Q2—especially when many have said they need to manage costs in certain areas.