The pricing slide in property lines may be bottoming out as rate reductions have slowed in the last three quarters, Aon Australia says in its latest market update report.

Buyers continue to hunt for the right coverage at the right price, but carriers are under pressure to lift margins which have been under sustained assault from weak global growth and low pricing.

“As a consequence we are starting to see the market push closer to the bottom in terms of pricing,” Aon says.

“Market softening is abating and rate reductions have slowed over the last three quarters and are beginning to flatten out in most areas, though insurers remain reluctant to walk away from business.

“New entrants continue to come into the market or expand their presence in new areas which, for the moment at least, is limiting the ability for prices to increase as many insurers would like to see.

The Aon report says property premiums are at a six-year low with its quarterly rate tracking index sitting at 81.6 in the third quarter of last year, up slightly from the previous quarter’s 81.2.

Risk transfer costs will remain low but pressure to increase pricing is building, meaning buyers will have to consider what suits them best as they shop around.

“There remains a fine balance between a buyer being rewarded by their incumbent provider for a longer-term view or moving to get a better price for shorter-term gain,” Aon says.

“During a period when rate reductions are slowing (and sometimes increasing), organisations have to weigh the price versus relationship equation.”