The premium landscape is shifting, with Marsh’s quarterly Global Insurance Market Index showing commercial rates were flat in the second quarter of this year.

It marks the first time since the first quarter of 2017 – almost seven years ago – that the composite global rate has not increased.

“The continued moderation of rates was largely driven by increasing competition among insurers in the global property market,” Marsh says.

Property insurance rates globally were flat, casualty lines rates increased 3%, and financial and professional lines rates decreased for the eighth consecutive quarter – by 5%.

“Property insurers and owners alike are closely watching the Atlantic hurricane season to see if any substantial storm activity might significantly impact their business,” Marsh says.

“Insurers remain concerned with large jury awards in US courts.”

Cyber insurance rates decreased 6% globally – repeating the 6% decrease in the previous quarter. 

“Insurers continued to focus on cybersecurity controls, typically looking for year-over-year improvements in cyber resilience.”

Marsh specialty and global placement president Pat Donnelly says the latest index shows “continued moderation”, which is “a positive movement for our clients”.

“As there remain rate increases in some lines, we see significant opportunities to help clients navigate the complexity they're facing today and support their risk financing decisions,” he said.

The Australia-dominated Pacific region, where rates increased faster when the hard market was peaking, appears to be ahead of the global trend, with the composite rate falling 5%.

Here is a sector-by-sector summary of the Pacific index.

Composite commercial rate change

Pacific property

Property insurance rates in the Pacific declined 4%, the first reduction since the fourth quarter of 2016.

Marsh says international and wholesale markets drove competition and long-term agreements were offered to some clients.

Small to medium-sized property clients generally attracted less competition, with rates ranging from no change to 5% increases, on average.

Claims-impacted and catastrophe-exposed accounts continued to experience rate increases.

Pacific casualty

Casualty insurance rates rose 1%, with capacity and competition increasing from new and existing markets.

Underwriting scrutiny continued, particularly in areas such as contractor injury, US exposures, per- and polyfluoroalkyl substances, and environmental, social and governance.

“Insurers continued to monitor potential claims inflation from litigation trends, including worker/contractor injury claims in Australia that affected back years, particularly for insurers on mining and construction risks,” Marsh says.

Pacific financial and professional lines

Financial and professional lines rates decreased 12%, with new market entrants contributing to an increase in capacity and competition.

Decreases were not uniform across product classes, with rates for directors' and officers' liability declining 15%-20%, on average.

Pacific cyber

Cyber insurance rates declined 5% as improved competition from insurers led to more coverage and retention options for clients, including increased limits, decreased retentions and improved pricing for maintaining a similar policy structure.

“Insurers' focus areas included supply chain risk, dynamic privacy regulations and ransomware,” Marsh says.

Cyber physical damage cover was an area of increased interest for clients, and cyber limit quantification is increasingly seen as valuable in understanding an organisation's cyber risk exposures.