Global commercial insurance rates fell by 2% in the fourth quarter of 2024, marking the second consecutive quarterly decline after seven years of rate increases, according to the Global Insurance Market Index released by global brokerage Marsh.
The decrease follows a 1% drop in Q3 2024 and reflects continued moderation in pricing trends across multiple lines of business.
Marsh attributed the decline to increasing competition in the commercial property insurance market, stabilisation in financial lines, moderation of casualty rate increases, and further reductions in cyber insurance pricing. The trend first emerged in Q1 2021 and has continued to shape global insurance pricing.
Regional trends varied, with the Pacific region experiencing the largest year-on-year composite rate decrease of 8% in Q4. The UK saw a 5% decline, while rates in Asia fell by 3%, and both Europe and Canada recorded a 2% decrease.
Meanwhile, rates in Latin America and the Caribbean (LAC) and India, the Middle East, and Africa (IMEA) increased by 1%. In the United States, rates remained flat after rising 3% in Q3 2024.
Marsh reported that property insurance rates globally declined by 3% in Q4, following a 2% decrease in the previous quarter. The Pacific region led the declines at 8%, while the US and UK each saw a 4% drop. Canada, LAC, and Asia recorded smaller decreases. Europe saw no change, and IMEA was the only region where property rates increased, rising by 3%.
Marsh noted that the global property market remains sensitive to loss events, including the ongoing Los Angeles wildfires, which could impact aggregate catastrophe losses in 2025.
Casualty insurance rates increased globally by 4%, following a 6% rise in Q3. The US recorded the highest increase at 7%, while LAC saw a 5% rise. Other regions experienced changes ranging from a 2% decline to a 1% increase.
Financial and professional lines continued to see declining rates, with a 6% global decrease in Q4. This marks the tenth consecutive quarter of reductions, driven by strong competition and available underwriting capacity across all regions.
Cyber insurance pricing fell by 7% globally in Q4, following a 6% decline in the previous quarter. Every region experienced decreases, which Marsh says reflects increased competition among insurers and continued improvements in cybersecurity measures by businesses.
John Donnelly (pictured above), global head of placement at Marsh, said that while reductions in property, financial lines, and cyber insurance rates benefit clients, challenges remain.
“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. We are committed to helping clients manage costs, protect their balance sheets, and successfully navigate the evolving market conditions,” Donnelly said.
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