Australian commercial prices continued to trend downwards in the third quarter, aided by ample capacity, Aon says.

Cyber and directors’ and officers’ cover experienced the largest rate reductions for big corporate buyers, according to the global broker’s quarterly update.

In cyber, new capacity continues to make for a competitive market, despite ransomware losses and the recent CrowdStrike outage. “Some buyers are taking the opportunity to review their cyber insurance programs in view of current favourable market conditions,” Aon says.

The D&O line also moved in buyers’ favour amid an “abundance” of new capacity.

Aon expects softening market conditions to prevail for the rest of this year as insurer growth aspirations lead to more intense competition on all layers, plus more flexible terms and conditions.

In property, price pressure is easing, although natural catastrophe exposures remain challenging.

“Favourable underwriting results continue to support insurer growth ambitions, driving competition for less exposed sectors,” the update says. “Claims-impacted and natural catastrophe-exposed risks continue to experience rate increases, while insurers’ focus on technical underwriting and modelled exposures is leaving some legacy industries and geographies facing affordability issues.”

Aon says some buyers are supplementing traditional natural catastrophe capacity with parametric solutions, which have the benefit of faster claims payouts and broader coverage.

Overall, underwriting appetite in the Australian market remained “prudent” despite increasing competition and the entry of new providers.

“Market conditions are now giving way to a more positive environment across all product lines, providing welcome relief to buyers following several years of insurer actions.

“Improved underwriting performance and investment yields are attracting new capacity and competition, resulting in improved terms and conditions for buyers.”

Globally, buyer-friendly conditions continued throughout the third quarter.

The broker expects Hurricane Milton to be “manageable” for the insurance and reinsurance industry, based on its preliminary assessments.

“No doubt, some domestic Florida insurers will face jeopardy. It seems unlikely that the reinsurance rate reductions that were expected for the January 1 treaty renewal season will materialise.”

But the picture is largely positive as year-end renewals approach. “Abundant capacity has led to improved pricing and terms across wider swathes of the market,” Aon says.

Read the report here.

From Insurance News magazine: Why the Crowdstrike outage should serve as a wake-up call for businesses worldwide