Insurers in Australia and the Pacific region have turned cautious on concerns over the virus pandemic’s fallout on the economy, according to Marsh.

Commercial rates in the Pacific region, where Australia is the biggest market, posted the strongest increase of 23% in the March quarter, outrunning the 14% jump in global prices and other markets, the broker’s quarterly pricing report says.

“Market conditions that we are now facing are amongst the most challenging I have faced in 40 years,” Head of Placement Asia Pacific John Donnelly told insuranceNEWS.com.au. “All classes of insurance are under pressure. We are seeing a continued hardening of the market.

“The COVID-19 outbreak and its subsequent impacts on the economy and businesses, both known and unknown, has created a very uncertain environment and one where we are seeing insurers err on the side of caution.”

Financial and professional liability pricing rose 33%, marking 11 straight quarters of double-digit increments.

The long-running factors that have caused prices to harden significantly in the last few years, such as growing class action claims, continue to strain capacity as insurers’ appetite for the risk remains weak.

“Conditions remained consistent with prior quarters,” Marsh says in the Global Insurance Market Report. “Side-C exposed listed companies experienced the largest increases, sometimes greater than 100%.”

Property pricing went up 23%, with double-digit hikes reported for catastrophe and non-catastrophe risks in Australia and New Zealand. Part of the rate surge was driven by last summer’s horror bushfire season and massive floods in December and January.

Casualty rates were up 8%, up slightly from 6% in the previous quarter. Pricing for some risks ranged from 10-20%.

The 14% rise in rates globally last quarter, as measured by the Global Insurance Market Index, was the largest year-on-year increase since 2012 when the price tracking monitor was created. It was also the 10th straight quarter that prices have headed north.

Financial and professional liability pricing had the sharpest rise of 26%, followed by property on 15% and casualty on 5%.

Pricing in the UK market surged 21%, which was the second highest after the Pacific region. US rates jumped 14% and continental Europe 8,% while Asia and the combined Latin America and Caribbean region saw increases of 6%.

Marsh expects subsequent updates will provide a better picture of the impact of the coronavirus outbreak, which was declared a pandemic in March by the World Health Organisation.