Composite insurance rates in Asia declined by 4% in the third quarter of 2024, following a dip of 3% in 2Q and 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
In Asia, property insurance rates declined by 3%.
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Despite limited capacity entering the region, increased competition among existing insurers resulted in continued downward pressure on rates across most segments, industries, and geographies, except for Taiwan.
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Long-term agreements (LTAs) were offered, generally with second year rate reductions built in.
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Insurers showed more flexibility around deductibles and coverage throughout the quarter.
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International and wholesale insurers continued to contribute to competition, resulting in generally improved renewal outcomes for clients in local, regional, and global programs.
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Clients showed increased interest in non-traditional risk transfer solutions, such as parametric insurance and captives.
Casualty rates decline, capacity stable
Casualty insurance rates declined by 2%.
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Available capacity remained stable.
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Local and international underwriters continued to focus on North American exposures.
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Increased claims activity was observed in the region for automotive liability and workers’ compensation, however rates remained stable on average.
Financial and professional lines rates decline, led by D&O
Financial and professional lines rates declined by 10%.
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Directors and officers (D&O) liability rates continued to drive overall rate changes in financial and professional lines, with double-digit decreases observed in most markets across the region.
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Continued lack of activity in the capital markets limited insurers' opportunities for new business, resulting in increased competition for renewable business.
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The largest rate decreases were observed in China, with an average decrease of 15% to 20%, due to a higher concentration of US-listed businesses, which tend to attract more capacity and competition.
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New market entrants continued to build their portfolios.
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Insurers from London and Bermuda started to quote for risks that were previously only covered with high excess, such as US-listed companies with Asian risk exposures.
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Rates for financial institutions (FIs) and professional indemnity (PI) insurance remained stable.
Cyber rates decline, controls improve
Cyber insurance rates decreased by 7%.
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Cyber insurance remained a growth area for insurers in the region, while rate reductions, increased capacity, and insurer willingness to expand coverage have created a favourable environment for buyers.
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The CrowdStrike outage raised concerns for some insurers; however, its impact on the market was limited due to a relatively short remediation process and the uptake rate on technology failure extensions related to network interruption insuring clauses.
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Competition remained strong, with insurers typically targeting primary positions and/or lower attachments.
- Underwriters appeared generally satisfied with the level of detail provided in application forms but continued to scrutinise vendor management.
Global pricing
Globally, composite insurance pricing dipped by 1% in 3Q2024, compared to staying flat in 2Q and rising by 1% in 1Q, according to the report.
By region, composite pricing for the third quarter of 2024 was as follows
- US: +3%
- UK: -5%
- Canada: -3%
- Europe: 0%
- Latin America and the Caribbean: +3%
- Asia: -4%
- Pacific: -6%
- India, Middle East, and Africa: -2%