Marsh CEO John Doyle said that while pricing continues to go up, the broker is beginning to see signs of rate moderation.
Speaking on Marsh & McLennan Companies’ year-end earnings call Thursday morning, Doyle said: “We are seeing some lines of business where the rate increase kind of flattened out or began to moderate.
“That's not to say that prices were down, but the average increase in the fourth quarter wasn't up as much as it was in the third quarter,” he added, citing the broker’s property portfolio in particular.
Doyle’s comments follow a record 20% quarterly increase in Marsh’s global commercial pricing index in the third quarter.
They also come after the pace of rate change at Travelers slowed in the fourth quarter, though underwriting executives said that conditions remain in place for market firming to continue.
Earlier this week, WR Berkley CEO Rob Berkley said the market was in “the throes of firming” and that he expected capacity to remain scarce. On its call, the WRB CEO also indicated that it had been achieving rate increases in excess of loss costs.
Speaking in general terms on Thursday, Doyle said the US, UK and Australia remained the most difficult markets to place business, and that he was “most concerned” for clients about rising costs for D&O coverage.
“[In] the excess liability market here in the US, [there’s] a lot of ongoing discussion about growing claim frequency, growing claim severity, in part driven by social inflation.” He also highlighted the “broad concerns” underwriters have regarding the level of rate adequacy for the line.
Tough conditions in the D&O market have attracted significant attention in recent months, with even “clean” accounts facing double-digit price increases.
In September, ratings agency Fitch said the D&O market likely had the worst underwriting result in the first half of 2020 in a decade.
Doyle also said that workers’ comp premiums have continued to trend down, and noted that the trend of rate declines had continued for longer than expected, but nonetheless had benefited clients.
Speaking more broadly, he said: “I do think as time wears on throughout the rest of 2021, other lines of business will likely moderate a bit.”
Earlier on Thursday, MMC reported fourth-quarter earnings that beat analyst estimates, with the risk and insurance services segment delivering combined underlying revenue growth of 3%.
