Commercial rates in the Pacific market – in which Australia makes up 80% of business – have risen slower than global levels for the first time in more than four years, according to Marsh’s latest price monitor for the March quarter.

The broker’s Global Insurance Market Index released last week shows Pacific prices at renewal rose 10% for the period, compared with 11% globally.

The Pacific number marks the fifth straight quarter in which the pace of increase has slowed, a trend Marsh says is due in large part to easing conditions in financial and professional lines, particularly for directors’ and officers’ (D&O).

Financial and professional lines rates went up 10%, after rising 18% in the December quarter.

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

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

“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.

The NSW/Queensland floods have curtailed any pricing relief that had been predicted for the property class at the start of the year, Marsh says.

“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 disaster.

“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%, the same rate of increase for the third straight 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.