Marsh says the “worst is over” for directors’ and officers’ (D&O) following the release of its latest quarterly rate tracker, and that the NSW/Queensland floods have curtailed any pricing relief that had been predicted for the property class at the start of the year.

Rate movements as monitored by the broker’s Global Insurance Market Index show overall conditions in the Australia-dominated Pacific market continue to ease, as prices rose 10% in the March quarter, from 13% in the preceding period. Australia makes up about 80% of the Pacific market for Marsh.

The March number marks the fifth straight quarter in which the pace of increase has slowed and the first in more than four years that Pacific rates have been less than the global average, Marsh says.

Commercial rates globally increased 11%, after rising 13% in the December quarter and 14.6% in the prior September quarter.

The easing of conditions in the Pacific market is due in large part to a slower rate of increase in financial and professional lines pricing, by 10% in the March quarter from 18% in the December quarter.

Marsh says the “levelling out” of pricing in D&O program continues and competition among insurers, particularly for excess layers, continues to improve pricing for some clients.

“The worst is over [for D&O],” Head of Global Placement Asia & Pacific and MD John Donnelly told insuranceNEWS.com.au today.

“We’re seeing new capacity in the market, mainly in the London market, and we’re seeing some competition for business for the first time in quite a few years.”

But “unfortunately” the same can’t be said for cyber, he said.

Marsh says cyber risk insurance remains challenging, mirroring trends observed globally and in the key US and UK markets.

Frequent and severe ransomware losses are putting pressure on pricing and deductibles and have led to a marked reduction in capacity and narrowing of key coverages, Marsh says.

While Pacific property rates increased 8% in the March quarter, similar to the prior quarter, Marsh says challenges have increased for risks in catastrophe zones, with flood a particular concern.

“Catastrophe risk continues to be a challenge, both in our market and the global market, and these floods just add to that challenge,” Mr Donnelly said, referring to the NSW/Queensland floods.

“It is a significant catastrophe event by global standards.”

He says there will essentially be two types of renewals, for those who were impacted by the floods and those who were not.

“Those who were not affected will continue to benefit from the improving market conditions that we have been seeing,” Mr Donnelly said.

“Those who have been affected by the floods are unlikely to benefit in the short term from those improving market conditions.

“But for those clients who have had flood losses, we don’t expect their price increases to be any greater than they have been in recent years.”

Pacific casualty pricing went up 15%, similar to the December quarter. Marsh says casualty remains challenging, due in large measure to claims inflation and reduced capacity from some major carriers.

Click here for the Marsh Pacific pricing update and here for the global update.