Commercial Insurance Rates See Further Declines
Global commercial insurance rates continued their downward trend in the fourth quarter of 2024, according to the latest Global Insurance Market Index released by Marsh. The index revealed a 2% drop, marking the second consecutive quarterly decrease after seven years of consistent rate increases.
This decline follows a 1% decrease in the third quarter of 2024. Marsh attributes this trend to increasing competition in the commercial property insurance market, along with stabilization in financial lines, moderation of casualty rate increases, and further reductions in cyber insurance pricing.
Regional Variations in Insurance Rates
Regional trends varied. The Pacific region saw the most significant year-on-year composite rate decrease, at 8% in Q4. The UK experienced a 5% decline, while rates in Asia fell by 3%. Both Europe and Canada recorded a 2% decrease.
In contrast, rates in Latin America and the Caribbean (LAC), as well as India, the Middle East, and Africa (IMEA), increased by 1%. The United States saw rates remain flat after a 3% increase in Q3 2024.
Property Insurance Experience Significant Declines
Property insurance rates globally declined by 3% in Q4, following a 2% decrease in the previous quarter, according to Marsh. The Pacific region again led the declines at 8%, with both the US and the UK experiencing a 4% drop. Canada, LAC, and Asia recorded smaller decreases. Europe saw no change, and IMEA was the only region where property rates increased, by 3%.
Marsh also noted that the global property market remains sensitive to loss events. They cited the ongoing Los Angeles wildfires, which could impact aggregate catastrophe losses in 2025.
Casualty, Financial, and Cyber Insurance Trends
Casualty insurance rates, however, increased globally by 4%, following a 6% rise in Q3. The US recorded the highest increase at 7%, while LAC saw a 5% rise. Other regions experienced changes ranging from a 2% decline to a 1% increase.
Financial and professional lines continued to see declining rates, with a 6% global decrease in Q4. This marks the tenth consecutive quarter of reductions, driven by strong competition and underwriting capacity across all regions.
Cyber insurance pricing fell by 7% globally in Q4, following a 6% decline in the previous quarter. Every region experienced decreases, reflecting increased competition among insurers and positive developments in cybersecurity measures by businesses.
John Donnelly, Global Head of Placement at Marsh
John Donnelly, global head of placement at Marsh, commented on the report’s findings. “The softening of rates across property, financial lines and cyber are a positive development for clients, while the challenges in other areas of the market, particularly in US casualty, are acute. We are committed to helping clients manage costs, protect their balance sheets, and successfully navigate the evolving market conditions,” Donnelly said.
