Global Commercial Insurance Rates Drop in Q4 for 2nd Consecutive Quarter: Marsh

Global commercial insurance rates fell 2% in the fourth quarter of 2024 following a 1% decline in Q3 2024—marking the second consecutive quarterly decrease after seven years of rising rates, according to the Global Insurance Market Index published by insurance broker Marsh.

Marsh said the result continues the moderating rate trend first seen in its index in Q1 2021, driven by intensified competition in commercial property insurance, a moderation of casualty rate increases, stabilizing pricing in financial lines, and accelerated rate reductions for cyber risks.

The UK and the Pacific regions again experienced the largest composite rate decreases in Q4, at 5% and 8% respectively, while US rates were flat following a 3% increase in Q3 2024. Asia saw 3% composite rate decreases. Europe and Canada both recorded declines of 2%, while Latin America and the Caribbean (LAC) and India, Middle East, and Africa (IMEA) experienced increases of 1%.

“The softening of rates across property, financial lines, and cyber are a positive development for clients, while the challenges in other areas of the market, particularly in US casualty, are acute,” said John Donnelly, global head of Placement, Marsh, in a statement.

Global product line trends, Q4 2024
Property rates declined 3% globally during Q4 2024, following a 2% decline in the prior quarter. The Pacific region experienced the largest decrease at 8%. In the US, property rates declined 4% (compared to a drop of 1% in the prior quarter). The UK rate decrease of 4% was level with Q3 2024, while Canada saw average decreases of 3%, compared with 1% in the prior quarter. Property rates were flat in Europe, continuing a moderation in the pace of increases. IMEA experienced a 3% increase in Q4, while LAC recorded a decline of property insurance rates of 1% (versus a 3% hike in Q3 2024), marking the first decrease in 25 quarters. Asia’s property insurance rates declined 3%, unchanged from the previous quarter.

Marsh said the global property market remains sensitive to loss events, particularly the ongoing Los Angeles wildfires, which will likely affect aggregate catastrophe losses in 2025.

Casualty insurance rates were again the only major coverage line to show an increase globally, rising 4% in Q4 2024, compared to an increase of 6% in the prior quarter. US casualty rates saw the largest increase at 7%, driven largely by excess/umbrella rates (versus an increase of 10% in Q3 2024). Latin America and the Caribbean experienced a 5% increase, while all other regions ranged from 2% declines to 1% increases.

Financial and professional rates decreased by 6% globally (versus a drop of 7% in Q3 2024), marking the 10th consecutive quarter of FINPRO rate decreases. Q4 rate declines were recorded in every region, reflecting robust competition and available capacity.

Cyber insurance rates decreased 7% globally, following a 6% decline in the previous quarter. Every region saw rate decreases, driven by strong competition among incumbent and new insurers as well as continued improvements in cybersecurity at many companies, Marsh said.

The Marsh report came out a week after USI Insurance Services reported that the commercial property insurance market in the US is showing signs of stabilizing.

USI’s 2025 Commercial Property & Casualty Market Outlook noted that accounts with unfavorable loss experience will likely see rates increase by 5-15% in the first half of 2025, compared to 10-20% increases in the second half of 2024.

Note: References to rate and rate movements in this report are averages. We have rounded percentages and rate movements to the nearest whole number.

Topics
Commercial Lines
Business Insurance