Composite insurance rates in Asia declined 3% in the second quarter of 2024, following a dip of 2% in 1Q2024, according to the "Global Insurance Market Index" published by the world's biggest insurance broking group Marsh.
The Index is a proprietary measure of global commercial insurance premium pricing change at renewal, representing the world’s major insurance markets and comprising nearly 90% of Marsh’s premium. The report outlines the changes in pricing for major branches of business.
Property insurance rates decline, insurer competition increases
Property insurance rates in Asia declined by 2% in 2Q2024, says the report. Other trends in property insurance in the region include:
Insurer competition increased for property risks, contributing to a second consecutive quarter of year-over-year rate decreases.
Although some clients experienced reductions, rates continued to increase moderately for risks that are highly exposed to natural catastrophe events.
Insurers continued to monitor inflation and the accuracy of declared values, including for business interruption.
There was an increased engagement of captives and other alternative risk solutions from clients considering or undergoing programme restructuring as they sought to manage costs. This could involve retaining more risk, particularly in the loss-exposed layers of programmes.
Casualty rates decline
Casualty insurance rates in Asia declined by 1% in the April-June quarter. Other highlights in the casualty insurance segment include:
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The amount of available capacity remained stable, although there were a small number of new market entrants.
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Underwriters continued to scrutinize North American exposures.
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Auto liability and workers’ compensation rates remained stable. Increased claims activity was observed in Hong Kong and Singapore.
Financial and professional lines rates decline, led by D&O
Financial and professional lines rates in 2Q2024 fell by 9%.
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Ample available capacity for D&O coverage led to increased competition.
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Some markets — including China, Hong Kong, South Korea, and Singapore — experienced average double-digit rate decreases in D&O liability renewals.
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A lack of activity in the capital markets has limited insurers’ opportunities for new business, resulting in increased competition at renewal.
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Rates for financial institutions (FIs) and professional indemnity (PI) insurance declined in the 10% to 15% range, on average.
Cyber rates decline, controls improve
Cyber insurance rates decreased by 6% during the second quarter of this year.
New capacity in the Singapore market and growing interest from the London market contributed to increased capacity and competition.
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Underwriters continued to require strong cybersecurity controls and/or plans for improvements. Insurers were generally more flexible in how cybersecurity-related information was delivered to them.
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Insurers continued to increase their focus on risks associated with AI usage.
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Insurers were generally more willing to offer broader coverages.
Global
Globally, composite insurance pricing was flat in 2Q2024, compared to an increase of 1% in 1Q, according to the report.
By region, composite pricing for the second quarter of 2024 was as follows
- US: +1%
- Europe: +1%
- Latin America and the Caribbean: +4%
- UK: -3%
- Canada: -5%
- Asia: -3%
- Pacific: -5%
- India, Middle East, and Africa: +4%