Insurance Pricing Is Showing Signs of Stabilization

According to the Global Insurance Market Index recently released by Marsh, global commercial insurance rates rose by just 1 percent in the first quarter 2024, a drop from the 2 percent growth seen in fourth quarter 2023.

The rate changes were largely consistent, with slight declines in most regions. This trend is mainly due to falling rates in financial, professional, and cyber insurance, along with increased competition in the global property insurance market.

Rates saw a 2 percent decrease on average in the United Kingdom, Asia, the Pacific, Canada, India, the Middle East, and Africa. Conversely, rates went up by 3 percent in the United States and Europe and by 5 percent in Latin America and the Caribbean.

Key highlights from the report include the following.

• Global property insurance rates grew by 3 percent on average in first quarter 2024, a drop from the 6 percent rise in the previous quarter. In the United States, companies with assets in disaster-prone areas like the Gulf of Mexico and California are experiencing smaller rate hikes or even decreases.
• Casualty insurance rates remained steady, with a 3 percent increase on average, consistent with the past five quarters. This stability is largely due to concerns over rising jury awards in the United States. 
• Financial and professional insurance rates continued their downward trend for the seventh quarter in a row. With rates falling by 7 percent this quarter, the decline has accelerated from the 6 percent drop last quarter. This is driven by rate cuts and heightened competition, especially in the United States, the United Kingdom, the Pacific, and Canada. 
• Cyber-insurance rates globally decreased by 6 percent, showing a more significant decline compared to the 3 percent drop in the previous quarter. Insurers are now placing greater emphasis on organizations' cyber-security strength, seeking yearly improvements in cyber resilience.

Pat Donnelly, president of Marsh Specialty and Global Placement at Marsh, commented on the findings, "A continued moderation in insurance rates, and an increased appetite among insurers particularly for well-managed risks, will be welcomed by clients that continue to face major global economic and geopolitical uncertainty."

He continued, "In a rapidly changing risk landscape, organizations will be under pressure to improve their risk management capabilities and make themselves more resilient to global shocks. We are working closely with our clients to ensure they have the right tools to navigate these challenges successfully and benefit from the continued improvement in market conditions."