Asia’s Commercial Insurance Rates Continue Decline in Q1 2025
Insurance rates in Asia fell by 3% in the first quarter of 2025, according to Marsh’s Global Insurance Market Index. This marks the fifth consecutive quarter of decline, with the last rate increase occurring in the first quarter of 2023.
Property Insurance Rates Decline
Property insurance rates decreased by 3% during the quarter. Insurers maintained strict underwriting practices, particularly for high-risk industries and businesses with prior losses. The emphasis on accurate valuations and increased participation from international and wholesale markets led to more favorable outcomes for clients across various insurance programs. Long-term agreements (LTAs) became more prevalent, often including rate reduction clauses and low-claims bonuses. Clients also showed increased interest in alternative risk transfer solutions, such as parametric and captive insurance, as they reassessed their deductibles and self-insurance options.
Casualty Insurance Trends
Casualty insurance rates declined by 2%. Organizations without recent losses and those benefiting from competitive London market capacity saw rate decreases ranging from 5% to 10%. In contrast, businesses with significant U.S. exposure faced rising premiums, especially for primary and umbrella coverage. Workers’ compensation and auto liability rates remained generally stable, although Japan and Thailand recorded auto liability increases of 5% to 10%. Insurers varied their approaches to PFAS-related risks, applying either broad or selective exclusions.
Financial and Professional Lines Experience Steepest Decline
Financial and professional lines saw the most significant rate decrease, with an 8% drop. Limited activity in capital markets constrained new business, intensifying competition for renewals. Directors and officers (D&O) liability insurance rates fell by 10% to 20% across the region. Rates for professional indemnity (PI) and financial institutions (FI) also dropped between 5% and 10%, reflecting strong market competition.
Cyber Insurance Rate Decrease
Cyber insurance rates decreased by 8%, driven by new entrants and increased capacity from existing providers. Despite intensified insurer competition, concerns about ransomware attacks remained high. Insurers and reinsurers reviewed war and infrastructure exclusions, leading to broader property-related offerings in the region.
The decline in insurance rates across various lines reflects a competitive market environment and continued underwriting discipline from insurers. As the market evolves, clients are exploring alternative risk management solutions and benefiting from more favorable terms in their insurance programs.
