Global Insurance Prices Continue Moderating as Rates Decline in Most Regions: Marsh

Global commercial insurance rates increased by 1% on average in the first quarter of 2024, compared with a 2% increase in Q4 2023, according to the Global Insurance Market Index published by Marsh, the insurance brokerage business of Marsh McLennan.

Rates continued to be relatively consistent, with most regions experiencing small decreases in Q1, said the report.

Marsh explained this was largely driven by a strengthening of the trend for decreases in financial and professional and cyber lines and increasing competition among insurers in the global property market.

On average, rates declined in the UK, Asia, Pacific, Canada and in India, Middle East & Africa regions by 2%, while rates increased in the US and Europe by 3%, and in Latin America and the Caribbean by 5%.

Other findings from the report include:

• Global property insurance rates were up 3%, on average, in the first quarter of 2024, compared to a 6% increase in the previous quarter.
• US property insurance rates increased by 8% on average. However, rates are beginning to stabilize, and many companies were able to secure additional limits in higher layers and improve coverage as competition increased and rate increases leveled off.
• Casualty insurance rates across the globe increased on average by 3%, the same as the previous five quarters, largely due to concerns about the size of jury awards in the US. (In the US, casualty insurance rates increased 4%; excluding workers compensation, the increase was 7%).
• Globally, cyber insurance rates decreased by 6%, compared to a 3% decrease in the prior quarter. Insurers are increasingly focused on the strength of organizations’ cybersecurity controls, typically looking for year-over-year improvements in cyber resilience. (In the US, cyber rates decreased 6% during Q1 2024).
• For the seventh consecutive quarter, the overall average pricing for financial and professional lines fell. Driven by rate reductions and increased competition for business – particularly in the US, UK, Pacific, and Canada – average rates decreased by 7% in the first quarter, compared to 6% decline in the previous quarter. (In the US, financial and professional lines rates decreased by 5% and directors and officers liability insurance for publicly traded companies declined 8%, the same as in the prior quarter).

“A continued moderation in insurance rates, and an increased appetite among insurers particularly for well-managed risks, will be welcomed by clients that continue to face major global economic and geopolitical uncertainty,” commented Pat Donnelly, president, Marsh Specialty and Global Placement, Marsh, in a statement.

Marsh noted that all references to rate and rate movements in the report are averages, unless otherwise noted. For ease of reporting, Marsh said it rounded all percentages regarding rate movements to the nearest whole number.

Source: Marsh