Premium rates around the world remain stubbornly stable, even decreasing in some sectors, in the third quarter, according to major broker Marsh.

Despite forecasts of a market hardening, the broker says global insurance markets were “cautious but competitive” during the period.

But it warns that although rates are stable, “the large level of losses in the first half of 2011 means that there is still the potential for a changing market dynamic this year, especially if there is a further significant market loss”.

US Risk Practices Leader Dean Klisura says global market capacity remains very strong, “but is more challenged in loss-affected regions”.

“The effect of losses earlier this year meant that even property programs not affected by losses – but with catastrophe exposures – typically renewed with increases of up to 10%, while non-catastrophe exposed programs generally renewed flat.”

In its latest market update, Marsh says catastrophe losses have increased at a lower rate than expected and despite predictions of a severe US hurricane season, only Hurricane Irene has caused significant insured losses.

“On catastrophe-exposed casualty risks, such as Australian bushfire, increases have been seen and, in some cases, reduced capacity,” says the report.

Marsh says that for renewals in Australia, where insurers had incurred flood losses, increases of up to 5% have been seen on programs without losses.