Singapore | 31 July, 2024
According to the Global Insurance Market Index released today by Marsh, the world’s leading insurance broker and risk advisor and a business of Marsh McLennan (NYSE: MMC), global commercial insurance rates were flat in the second quarter of 2024 (down from a 1% increase in Q1 2024).
The findings mark the first time in nearly seven years – since the third quarter of 2017 – that the global composite rate has not increased. The continued moderation of rates was largely driven by increasing competition among insurers in the global property market.
On average, rates decreased in Canada and the Pacific by 5%, and in the UK and in Asia regions by 3%. Rates increased in the US and Europe by 1%, and in the Latin America and the Caribbean, and India, Middle East, and Africa (IMEA) regions by 4%.
Other findings included:
- Property insurance rates globally were flat compared to 3% and 6% average increases in Q1 2024 and Q4 2023, and either declined or moderated in every region except IMEA. Property insurers and owners alike are closely watching the Atlantic hurricane season to see if any substantial storm activity might significantly impact their business.
- Asia property insurance rates declined 2%. Insurer competition increased for property risks, contributing to a second consecutive quarter of year-over-year rate decreases. However, rates continued to increase moderately for risks that are highly exposed to natural catastrophe events. There was an increased engagement of captives and other alternative risk solutions from companies considering or undergoing programme restructuring as they sought to manage costs.
- Casualty lines rates increased 3% globally, the same as the previous six quarters; Canada and Asia showed decreases while the UK and IMEA were flat. Insurers remain concerned with large jury awards in US courts.
- Asia casualty insurance rates declined 1%. Local and international insurance markets continued to exhibit disparity in pricing and coverage, with local markets offering competitive rates for standard risks and international markets being favoured for more complex risks with limited local coverage options. Underwriters continued to scrutinise North American exposures.
- Financial and professional lines rates decreased for the eighth consecutive quarter – by 5% globally – with rate decreases recorded in every region. In the US, UK, Canada, and Europe, the rates decelerated as compared to the previous quarter, while accelerated in other regions.
- Financial and professional lines rates in Asia declined 9%. Directors and officers (D&O) liability rates continued to drive conditions in the overall financial and professional lines. Ample available capacity for D&O coverage led to increased competition.
- Cyber insurance rates decreased 6% globally – repeating the 6% decrease recorded in the prior quarter – with decreases in every region. Insurers continued to focus on cybersecurity controls, typically looking for year-over-year improvements in cyber resilience.
- Asia cyber insurance rates decreased 6%. New capacity in the Singapore market and growing interest from the London market contributed to increased capacity and competition. Insurers continued to increase their focus on risks associated with AI usage.
Commenting on the report, Pat Donnelly, President, Marsh Specialty and Global Placement, Marsh, said “We have seen the continued moderation of the global composite rate over the past few years, with a stable composite in Q2 2024, which is a positive movement for our clients. As there remains rate increases in some lines, we see significant opportunities to help clients navigate the complexity they're facing today and support their risk financing decisions.”
