Australian property premium rates declined for the first time in more than seven years in the second quarter, easing 4%, according to Marsh's latest commercial index.

International and wholesale markets drove competition, with long-term agreements offered to select clients – some including reductions in year two, the broker’s latest Global Insurance Market Index, released today, says.

However, claims-affected and catastrophe-exposed accounts typically continued to experience rate increases, and rates for small to medium property clients on average ranged from no change to 5% rises. 

Australian commercial rates overall fell 5%, the second consecutive quarterly decline, while global commercial rates were flat – ending a 26-quarter streak of increases.

Marsh says the second quarter marked the first time in nearly seven years that the global composite rate did not increase, running flat from April to June.

Property insurance rates globally were flat, while casualty lines increased 3%.

Marsh specialty and global placement president Pat Donnelly says the trends are positive for clients, though persistent rate increases in some lines mean there are still “significant opportunities to help clients navigate the complexity they’re facing today and support their risk financing decisions”.

In the Pacific region, where Australia makes up about 80% of business tracked by the index, casualty insurance rates rose just 1%. Marsh says underwriting scrutiny continued, particularly in areas such as contractor injury, US exposures, and environmental, social and governance, as well as polyfluoroalkyl substances.

Insurers continued to monitor potential claims inflation from worker/contractor injury in Australia that affected back years, particularly for insurers in mining and construction risks.

Financial and professional lines rates dropped 12% in the Pacific, with rates for directors’ and officers’ liability down 15%-20% on average. The financial and professional lines drops were not uniform across the various product classes. Long-term agreements were offered to some clients.

Pacific 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.

Cyber insurer focus areas included supply chain risk, dynamic privacy regulations and ransomware, while Marsh clients sought cyber physical damage cover.

On average, Pacific rates decreased by 5%, outpacing falls of 3% in the UK and Asia regions, and rate increases of 1% in the US and Europe 

Overall financial and professional lines rates decreased for the eighth consecutive quarter – by 5% globally – with rate drops recorded in every region. Cyber insurance rates decreased 6% globally, with falls in every region.

The quarterly index is the global broker’s proprietary measure of commercial insurance rate change at renewal.