Commercial rates in Australia and the wider Pacific market went up 13% in the fourth quarter last year, following a 17% rise in the preceding three-month period, according to Marsh’s Global Insurance Market Index.

Marsh says the December number marks the fourth consecutive quarter in which the rate of increase has slowed and the first since 2016 that composite pricing in the region was not higher than the global average.

Rates globally increased 13% in the December quarter, similar to the Australia-led Pacific market.

The global figure marks a slowdown in the pace of increases, confirming Marsh’s earlier assessments that pricing has peaked after recording a 22% spike in the final quarter of 2020.

“We expect pricing increases to continue moderating throughout the year, barring unforeseen changes in conditions,” Head of Global Placement Asia & Pacific and MD John Donnelly said.

“We believe this trend has now been established in the market. Cyber, however, continues to go against the trend.”

In the Pacific market, property insurance pricing increased 8%, the fourth consecutive quarter in which the pace of pricing increases declined. In the previous quarter, rates rose 11%.

Marsh says challenges remain for high-hazard industries, risks in catastrophe zones and clients with poor loss history while exposure to secondary catastrophe perils such hail remains a particular concern.

In the casualty line, pricing surged 15%, similar to the prior quarter with conditions still seen as challenging largely because of claims inflation and reduced capacity from some major carriers.

Financial and professional lines pricing rose 18%, weaker than the 25% jump recorded in the third quarter.

Marsh says directors’ and officers’ continues to see a “levelling out” amid stronger competition, particularly for excess layers, leading to improved pricing for some clients.

However professional indemnity premiums again increased as capacity continued to tighten while in cyber, conditions remain challenging due to frequent and severe ransomware losses.

It was a similar picture for cyber in the US – the world’s largest cyber insurance market – and in the UK. US cyber pricing went up 130% and UK 92%, compared with 96% and 73% in the third quarter.

Marsh says many insurers sought to change coverage terms and conditions as frequency and severity of claims continued to increase.

Globally property pricing increased 8% in the fourth quarter (9% in previous quarter), casualty 5% (6% in previous quarter) and financial and professional lines 31% (32% in previous quarter).