US property and casualty markets are expected to remain soft this year while demand for cyber cover continues to rise, according to Marsh.

“The US commercial property insurance market softened further [last year], continuing a two-year trend that is expected to continue into [this year], barring unforeseen changes in conditions,” the global broker’s report on the market says.

Rates have fallen due to minimal catastrophe losses, insurer competition and an influx of alternative capital sources.

In the casualty sector, capacity and competition remain high, with insurers often offering rate reductions last year to retain favourable accounts.

Underwriting performance generally remains positive, but overall profitability continues to lag previous years due to the slow economic recovery and low interest rates.

“There are no indications that investment returns will increase any time soon, contributing to insurers’ focus on underwriting capacity,” the report says.

Marsh says some insurers are re-examining their portfolios’ profitability, which may lead to reduced capacity, higher rates and higher attachment points in some industries.

Regarding cyber security, industries recognise it as a mainstream concern, with attacks, threats and attempts aimed at businesses of every size and sector.

US client demand for cyber cover remained strong despite rate increases last year, and that trend is expected to continue this year, according to the report.

Typical rate increases last year were 10-15%, but in the retail sector there were rises of 45-55%.

This year’s Guy Carpenter renewal report for reinsurance says prices at the start of the year decreased across most lines of business and geographies, but at a slower pace than in previous years.

“Sources of capital and the process of bringing that capital in and out of the market rapidly have changed, most likely permanently,” the Marsh & McLennan-owned reinsurance broker says.

“This competition has fostered more solution-oriented dialogue between buyers and sellers, and capital providers are working to create innovate approaches to coverage needs for new uninsured or underinsured perils.”