Pacific commercial prices rose at a faster pace in the first quarter, with catastrophe property risk the driver in a broadly moderating market, a Marsh report shows.

Pricing rose 7% in the March quarter compared with a 5% gain for the December period, with property insurance pricing increasing 8% compared to 4% previously.

Marsh Head of Global Placement Asia Pacific John Donnelly says inflation, reinsurance availability and cost, and catastrophe risk were the key drivers of the first quarter property increase, but more broadly moderating market conditions are continuing, reflecting the trend seen in the past two years.

Prices in the Australia-led Pacific market have increased at a slower pace since peaking in the fourth quarter of 2020, based on renewal business tracked by the Global Insurance Market Index.

Pacific casualty pricing increased 10% in the quarter, maintaining the same level of increase as in the prior two quarters, with insurers maintaining a focus on claims inflation due to litigation trends and material cost inflation.

Financial and professional lines remained flat overall, while directors’ and officers’ renewals saw reductions of 5-10%, and in some cases more, with increased competition, particularly for excess layers.

Cyber pricing increased 25% in the March quarter compared to 28% in the prior period after prices began stabilising in the second half of last year following previous sharp premium gains.

Globally, commercial insurance pricing rose 4% in the first quarter, the same as in the December period, and marking the 22nd consecutive quarter in which composite pricing rose.

Property insurance increased 10%, compared to 7% in the fourth quarter, while in the US property pricing increased 17% compared to 11% in the fourth quarter, with a focus on inflation and valuations and catastrophe exposure.

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