Global commercial insurance rates shockingly experienced their first decline in seven years, according to the Global Insurance Market Index released by Marsh.
Rates fell by 1% in the third quarter of 2024, marking the first quarterly decline recorded by the index since the third quarter of 2017, according to FF News.
The decrease reflects a continuation of the moderating rate trend, which is primarily driven by increased competition among insurers in the global property market.
The report reveals that rates decreased significantly across various regions. In the Pacific, rates dropped by 6%, followed by a 5% decline in the UK, 4% in Asia, 3% in Canada, and 2% in the India, Middle East, and Africa (IMEA) region.
Conversely, rates increased by 3% in the US and in the Latin America and the Caribbean (LAC) region, while they remained flat in Europe.
Further findings indicate that property insurance rates globally fell by 2%, following a period of stability in Q2 2024 and a 3% increase in Q1 2024. The decrease was evident in the US, UK, Canada, Asia, and the Pacific, while rates increased in Europe and LAC.
Insureds with assets concentrated in catastrophe zones, such as the Gulf of Mexico and California, saw above-average rate decreases, although this data was collected before the recent hurricanes that struck the Gulf.
In contrast, casualty lines rates saw a global increase of 6%, up from 3% rises in each of the preceding seven quarters.
This increase is largely attributed to concerns regarding significant jury awards in US courts. Meanwhile, financial and professional lines rates experienced a substantial decrease of 7% globally, marking the ninth consecutive quarter of declines across all regions.
Cyber insurance rates also saw a 6% decrease globally, maintaining the same rate of decline as the previous two quarters, with reductions noted in every region. An increase in non-cyber policies containing cyber exclusions has prompted greater attention to potential coverage gaps for property damage or bodily injury resulting from cyber events.
Commenting on the report, Marsh Specialty and Global Placement President Pat Donnelly said, “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. 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.”
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