Insurance rates in the Pacific region, dominated by the Australian market, dropped by 6% in the third quarter of 2024, according to the "Global Insurance Market Index" published by the world's biggest insurance broking group Marsh.
The fall in the third quarter was the largest after decreases of 2% in 1Q2024 and 5% in 2Q. Rates declined in the last six consecutive quarters.
The 3Q2024 report highlights the following:
Property insurance rates declined by 6% in 3Q2024.
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Competition increased, including among domestic insurers, with medium-sized clients generally attracting insurer interest.
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Long-term agreements (LTAs) continued to be offered to many clients; some included reductions in Year Two.
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Claims-impacted and catastrophe (CAT)-exposed organizations typically continued to experience rate increases.
Casualty insurance rates were flat in the third quarter.
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Insurer capacity generally increased.
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Underwriters continued to scrutinize areas of concern including per- polyfluoroalkyl substances (PFAS); US-domiciled risks, particularly auto liability; and organisations with losses.
Financial and professional lines pricing decreased by 14%.
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Rate reductions for public D&O were steeper compared to private D&O.
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There was strong competition among legacy insurers and new market entrants.
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D&O liability claims activity remained low.
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Capacity for all financial and professional lines remained plentiful; however, it was more difficult to renew with broader coverage and lower retentions.
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LTAs were offered in many cases.
Cyber insurance rates decreased by 11%.
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Cyber capacity remained ample, and competition on primary and lower attachments drove rate reductions.
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Insurers demonstrated willingness to negotiate on critical suppliers and various coverages within cyber policies, including betterment, business interruption, and “bricking” rates, which refers to hardware that requires replacement after an event. LTAs were offered in some cases.
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Underwriters focused on supply chain risk, privacy regulations, and ransomware.
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Some clients increased their limits.
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Financial exposure from a cyber event remained a point of discussion during underwriting meetings.
Global pricing
Globally, composite insurance pricing dipped by 1% in 3Q2024, in contrast 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%