Global Commercial Insurance Rates See 1st Quarterly Decline in Seven Years: Marsh
Global commercial insurance rates fell 1% in the third quarter of 2024 from the previous quarter, which marked the first time the index has recorded a quarterly decline since the third quarter of 2017, according to the Global Insurance Market Index published by insurance broker Marsh.
The result is a continuation of the moderating rate trend, which is largely being driven by increased competition among insurers in the global property market, Marsh said.
The UK and the Pacific regions experienced the largest composite rate decreases, at 5% and 6%, respectively, while the US and the Latin America and Caribbean (LAC) region experienced the highest composite rate increases, both at 3%. On the other hand, rates were flat in Europe.
Other findings included:
- Property insurance rates globally fell 2%, after being flat in Q2 2024 and experiencing a 3% increase in Q1 2024. Rates declined in the US, UK, Canada, Asia, Pacific, and in the India, Middle East and Africa (IMEA) region, but increased in Europe and LAC.
- Insureds with assets concentrated in catastrophe zones such as the Gulf of Mexico, the US Atlantic coast, or California, as well as those that had recently experienced higher than average rate increases, generally saw above average rate decreases. However, this was before the recent Gulf hurricanes.
- In the US, propertyinsurance rates declined 1%, compared to an increase of 2% in the prior quarter.
- Casualty lines rates increased 6% globally, having risen by 3% in each of the previous seven quarters, largely driven by concerns around large jury awards in US courts.
- In the US, casualty rates increased significantly, by 10%, driven in large part by excess/umbrella rates. Excluding workers’ compensation, the increase was 14% in the US. In the umbrella and excess liability market in the US, risk-adjusted rates increased 21% compared to 10% in the prior quarter.
- Financial and professional lines rates decreased by 7% globally — the ninth consecutive quarter of declines — with rate decreases recorded in every region.
- In the US, directors and officers (D&O) liability rates continued to decline, though the pace of decreases moderated to 4%, compared to 5% in the prior quarter.
- Cyber insurance rates decreased 6% globally — the same rate of decrease as the previous two quarters — with decreases in every region. More non-cyber policies contained cyber exclusions, which led to increased focus on ways to address potential coverage gaps for property damage or bodily injury caused by a cyber event.
- In the US, cyber insurance rates decreased 4%.
“In the third quarter, for the first time in seven years, we saw a decline in the global composite rate, with three of the four major product lines experiencing a decrease, which is a positive development for our clients,” commented Pat Donnelly, president, Marsh Specialty and Global Placement, Marsh.
“We are watching the markets closely for any impacts from the recent devastating storms during the North American hurricane season, and continue to offer support to our clients and the broader communities affected by them.”
Note: All references to rate and rate movements in this report are averages, unless otherwise noted. For ease of reporting, Marsh has rounded all percentages regarding rate movements to the nearest whole number.
Source: Marsh
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