Asia’s Commercial Insurance Rates Continue Decline in Q1 2025
Insurance rates in Asia fell by 3% in the first quarter of 2025, driven by a competitive market environment and continued underwriting discipline from insurers, according to Marsh’s Global Insurance Market Index. This marks the fifth consecutive quarter of decline, with the last rate increase recorded in the first quarter of 2023 at 1%.
Property Insurance Rates Decline
Property insurance rates also declined by 3% during the quarter. Insurers maintained strict underwriting practices, especially for high-risk industries, distressed businesses, and accounts with prior losses. The emphasis on accurate valuations and participation from international and wholesale markets contributed to more favorable outcomes for clients across various insurance programs. Long-term agreements (LTAs) became more common, often including rate reduction clauses and low-claims bonuses. Clients also showed increased interest in alternative risk transfer solutions, including parametric and captive insurance, as they reassessed deductibles and self-insurance options.
Casualty Insurance Rates Decrease
Casualty insurance rates declined by 2%. Organisations without recent losses and those benefiting from competitive London market capacity saw rate decreases between 5% and 10%. In contrast, businesses with significant U.S. exposure faced rising premiums, especially for primary and umbrella coverage. Workers’ compensation and auto liability rates were generally stable, though Japan and Thailand recorded auto liability increases of 5% to 10%. Underwriting approaches to PFAS-related risks varied, with insurers applying either broad or selective exclusions.
Financial and Professional Lines Experience Steep Decline
Financial and professional lines experienced the steepest decline, with rates down 8%. 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 Rates Decrease
Cyber insurance rates decreased by 8%, driven by new entrants and increased capacity from existing providers. Whilst insurer competition intensified, concerns about ransomware attacks—especially those involving data encryption and business interruption—remained high. Insurers and reinsurers reviewed war and infrastructure exclusions, and discussions around physical damage coverage and ‘silent cyber’ led to broader property-related offerings in the region.
