Commercial rates in Australia were flat at renewals in the fourth quarter of last year, according to Marsh’s latest Global Insurance Market Index.

The update confirms the global broker’s previous assessment that conditions were gradually turning in favour of insureds after increases slowed over the course of last year. Rates went up 7% in the first quarter last year, then by 2% in the second quarter and 1% in the third.

In the property class, prices were flat, marking the first time in 26 quarters that average property rates did not increase, Marsh says.

Conditions in the property class reflected insurer competition for business and increased capacity to write more business, but for loss-impacted and catastrophe-exposed accounts, there were price increases.

In the financial and professional lines class, rates decreased 5%, similar to the decline in the third quarter. The drop reflected falls in directors’ and officers’ (D&O) liability prices, with many clients experiencing decreases of 15% or more, Marsh says.

The broker says competition remained strong for D&O primary and excess layers, from new insurers and legacy carriers alike, and that insurers are monitoring claims trends related to the use of generative artificial intelligence.

Flat cyber rates in the December quarter also contributed to the downward pressure on financial and professional lines prices. 

“Cyber rates moderated significantly, with rollover of rates at renewal becoming the norm,” Marsh said. “Increased competition from insurers typically opened up additional options for clients.”

In the casualty class, increases slowed to 4% from 5% in the third quarter. Insurers deployed new capacity and restructured programs, contributing to improved results and increased options for buyers.

Globally, commercial renewal rates increased 2% in the fourth quarter following a 3% rise in the third quarter. Marsh says rates were relatively consistent across almost all regions during the period.

“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.”