Commercial insurance rates in the Australia-dominated Pacific region have continued a downward trend, dropping by 6% in the third quarter, according to Marsh’s premium index.  

The drop follows a 5% downturn in the broker’s second-quarter report. 

In the property class, rates fell 6%, with insurer competition increasing as long-term agreements continued to be offered to clients. It was the second consecutive reduction after last quarter’s 4% fall. 

Financial and professional lines fell 14%, with Marsh noting decreases for most directors’ and officers’ liability policies. Marsh says capacity remained “plentiful”, but it notes lower retention of policies and more difficulty renewing with broader coverage.

In casualty, rates flattened amid a general increase in insurer capacity. The report notes continued underwriter scrutiny on “areas of concern” such as per- and polyfluoroalkyl substances and US risks. 

Cyber rates declined 11% amid ample capacity and competition.  

“Insurers demonstrated willingness to negotiate on critical suppliers and various coverages within cyber policies, including betterment, business interruption and ‘bricking’ rates, which refers to hardware that requires replacement after an event,” Marsh said.  

The broker says cyber underwriters continue to focus on supply chain risk, privacy regulations and ransomware.  

The third-quarter index also records the first decline in seven years in global commercial rates, which dropped by 1% as the UK, US and Asian markets decreased and Europe flattened.

“We saw a decline in the global composite rate, with three of the four major product lines experiencing a decrease, which is a positive development for our clients,” Marsh specialty and global placement president Pat Donnelly said.  

“We are watching the markets closely for any impacts from the recent devastating storms during the North American hurricane season and continue to offer support to our clients and the broader communities affected by them.”

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