Commercial rates fell 8% in the Australia-Pacific market in the fourth quarter of last year, the biggest drop globally, according to the latest Marsh price tracker.

UK rates fell 5% and Asia was down 3%, while Europe and Canada posted reductions of 2%, the Global Insurance Market Index shows.

Rates in the US were flat, and in Latin America prices went up 1%.

Globally, commercial rates fell for the second straight quarter, down 2% in the October-December period.

Marsh says the rate movement “continues the moderating rate trend first seen in Q1 2021, which is being driven by intensified competition in commercial property insurance, a moderation of casualty rate increases, stabilising pricing in financial lines and accelerated rate reductions for cyber risks”.

Global head of placement John Donnelly said: “The softening of rates across property, financial lines and cyber is a positive development for clients, while the challenges in other areas of the market, particularly in US casualty, are acute.”

In the Pacific market – where Australian renewals dominate – the 8% drop marked a fourth straight quarter of softening prices for commercial clients. 

By line, property rates fell 8%, casualty weakened 2%, and financial and professional lines dropped 12%.

In property, insurers appeared to focus on premium growth, leading to increased competition, Marsh says. But claims-impacted accounts still faced scrutiny and providers were reluctant to offer significant price reductions.

In financial and professional lines, Marsh says significant competition continued for directors’ and officers’ liability risks, and in cyber, rates typically increased only when there were significant changes in underlying risk profiles.