The Australian commercial property market is seeing signs of reduced capacity, while premiums have risen by 12.5% for three consecutive quarters, broker Marsh says.

After increases of 7.5% in the second and third quarters of last year, price rises picked up to 9.5% in the fourth quarter and further gained pace this year.

While commercial casualty pricing has increased by 5.7% on average over the past three quarters, this is down from 6.4% in the fourth quarter of last year.

Marsh says increasing competition should stabilise commercial casualty pricing.

The crisis in directors’ and officers’ coverage is clear from the Marsh figures, with premiums in financial and professional liability lines rising 23.3% over the past two quarters. Pricing gained about 15% in each of the preceding two quarters.

Overall, Australian commercial insurance average pricing increased by more than 13% in the third quarter, higher than any other region in the broker’s global update. The rise builds on steady increases since the start of last year, reversing a long period of decline.

John Donnelly, Marsh’s Sydney-based Global Placement and Specialties Leader Pacific and Placement Leader Asia, says the price rises come as insurers look to correct prior losses.

Worldwide, average commercial insurance prices increased 1% in the third quarter.