Marsh’s half-year report card for Australia notes an “abundance of capacity” in the insurance and reinsurance markets, “more pronounced” competition among direct insurers and declining reinsurance treaty pricing on most lines in the June-July renewal period.

The mid-year Insurance Market Update also points to intensified price competition and a broadening of policy coverage.

“Insurers are offering multi-year agreements and, as is typical in soft market cycles, multiline packaged deals have been negotiated,” the report says.

Marsh says competition in the property insurance market has reached “unprecedented levels”.

“Most insurers are striving to gain market share and boost premium income. Clients are experiencing record low rates and there appears no end in sight to this highly charged competitive environment.”

Marsh says SMEs have typically enjoyed price reductions of 7.5-15%. Corporate clients saw even greater cuts. However, Marsh says the Australian insurance market remains buoyant.

Meanwhile, pricing in global insurance markets fell for the fifth consecutive quarter in the three months to June 30.

The Marsh Risk Management Global Insurance Index dropped to 99.5 – its first time below its inception value of 100.

Marsh says continued strong capacity, especially for property lines, and the absence of significant losses are driving down rates.

Regionally only the US and the UK indices remained above 100. Asia-Pacific, including Australia, was at 95.8.