Insurance rates remain stable as property price increases continue to moderate
Global commercial insurance rates increased by 2% in the fourth quarter of 2023 (down from a 3% increase in Q3), 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). The fourth quarter marks the 25th consecutive quarter of rate increases.
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Rates continued to be relatively consistent across almost all regions in Q4. As with Q3 and Q2, this was largely driven by a continuation of the trend for pricing decreases in financial and professional lines and a small decrease for rates in the cyber insurance market. Moderating rate increases for property risks also contributed to the quarter’s results, with increased competition offsetting the impact of strong demand and ongoing losses.
On average, rates in Q4 were flat in the UK, Canada, Asia, and Pacific. Rates increased in the US by 3%, in Europe by 4%, in India, Middle East & Africa by 4%, and in Latin America and the Caribbean by 8%.
Other findings included:
- Global property insurance rates were up 6%, on average, in the fourth quarter of 2023, a slight fall from the 7% increase in the previous quarter; casualty insurance rates increased by 3%, the same as the previous four quarters.
- For the sixth consecutive quarter, the overall average pricing for financial and professional lines fell. Driven by rate reductions and increased competition for business – particularly in the US, UK and Pacific – average rates decreased by 6% in the fourth quarter, the same as the previous quarter.
- Globally, cyber insurance rates decreased by 3%, compared to a 2% decrease in the prior quarter; only the second quarter to record an average decrease since 2018.
- Insurers in most regions remain concerned about the impact of inflation on asset values and claims costs during renewal discussions.
Commenting on the report, Pat Donnelly, President, Marsh Specialty and Global Placement, Marsh, said: “At a time of much global economic uncertainty, clients will welcome the increased stability in insurance rates – especially for property exposures – and increased competition from insurers for well-managed risks."
"With 2024 set to be a year of significant geopolitical and economic challenges, we are working closely with clients to develop solutions that will enable them to become more resilient to global events and to take advantage of improving market conditions."
