Commercial insurance rates in the Australia-led Pacific market rose 23.2% in the three months to June, marking a slowdown in the pace of price growth for the second straight quarter, according to Marsh’s latest Global Insurance Market Index report.

Pacific rates increased 29.4% in the March quarter compared with 34.6% in the preceding quarter.

Globally rates also accelerated at a slower pace, rising 15% in the June quarter from the 17.6% increase in the preceding period. It was also the second straight quarter of moderation in price growth.

Marsh says the readings from the index - a proprietary measure of global commercial insurance premium pricing changes at renewal - are further confirmation that rate increases will likely moderate in the coming months having peaked in the December quarter.

“The statistics are bearing that out,” Head of Global Placement for Asia & Pacific John Donnelly told insuranceNEWS.com.au today. “It’s a global trend.

“The numbers that you see in [in the Pacific market] report are predominantly Australian so they’re not influenced by other countries in the region.”

Insurance providers have a pre-set technical rate that will produce the required levels of profitability for their businesses.

Going by the Marsh price index for the June quarter and past readings, it suggests they have reached that technical rate but there are still some lines that remain challenging, such as cyber.

“There are major challenges in the market for cyber insurance and the percentage increases that insurers are looking for on cyber insurance are really quite significant now and that's a global trend,” Mr Donnelly said.

“It’s following all the ransomware losses… so cyber insurance is going up quite substantially.”

The pricing index report says Pacific rates for financial and professional lines, which includes cyber, rose 37% in the June quarter following a 48% surge in the preceding quarter.

“Cyber premiums increased significantly, in line with the global trend,” the report said. “Capacity reduced and many programs were not able to complete historical limits.”

Marsh says directors’ and officers’ liability pricing continued to level out as more excess layer capacity entered the market while professional indemnity premiums increased as capacity tightened.

Pacific property pricing increased 14% in the June quarter, slower than the 20% rise seen in the March quarter while casualty jumped 18% higher, marginally up from 17% in the earlier three-month period.

Globally property pricing gained 12%, weaker than the 15% rise recorded in the March quarter, casualty stayed at 6% while financial and professional rates increase moderated to 34% from 40%.

“Clients continue to face a challenging risk and insurance landscape as the global economy emerges from the pandemic,” President Marsh Specialty and Marsh Global Placement Lucy Clarke said.

“Although we expect continued pressure on pricing, especially in loss affected lines, we also expect the general trend of moderating price increases to continue through the rest of the year.”

Click here to access the Marsh report.