Pacific commercial insurance rates fell 12% in the third quarter of 2026, the 11th consecutive quarterly decline, but Marsh’s latest data shows that exposures, claims records and program structure continue to influence where individual clients land.
Casualty rates fell 11%, yet Marsh said significant growth in exposures could still lead to smaller reductions or even premium increases.
Marsh’s Pacific region groups Australia with New Zealand and the wider South Pacific, and it posted a 13% composite decline in the second quarter, the second-steepest of any region.
The Global Insurance Market Index (GIMI) is Marsh’s proprietary measure of commercial rate changes at renewal, based on the segment mix of its client base. Property recorded the largest fall of the major lines.
Read more: Global commercial insurance rates fall 6% in Q2, Pacific posts second-steepest regional decline
US exposure continued to weigh on casualty results, and unfavourable claims performance remained a pressure point. Casualty rates have nonetheless fallen every quarter since the fourth quarter of 2024.
The US influence shows in Marsh’s global figures. Global commercial rates fell 5% in the third quarter, but casualty rose 1% and US excess casualty climbed 13%, which Marsh president and chief executive John Doyle attributed to inflationary pressure and loss costs.
The pattern is not new. In the first quarter, when Pacific casualty rates fell 9%, Marsh reported that clients with US exposure, adverse claims performance or significant exposure growth typically received flat renewals or larger increases.
Insurers focused on profitable, higher-premium placements, which supported favourable outcomes. Local and international wholesale insurers sought to retain existing primary and excess business and to write new accounts.
Liability claims also carry uncertainty locally. APRA data reported in June showed public and product liability, for direct business, carrying a weighted average outstanding claims risk margin of 16.9%, and a premium liability risk margin of 18.5%.
Read more: APRA data shows where claims uncertainty is highest - and why size changes the picture
Restructuring programs with alternative layer attachment points, combined with a strategic approach to renewals, tended to improve results and generate premium savings, Marsh said.
Aon has described a similar picture. Terence Williams, Aon’s head of commercial risk for Asia Pacific, said in an interview published in July that the traditional market cycle no longer describes how commercial pricing behaves across Australia and Asia-Pacific.
Property rates fell 14%, compared with 15% in the previous quarter. Most placements were oversubscribed, and insurers kept adding capacity for new and incumbent business.
Competition stayed high, and price remained the main differentiator. Coverage also continued to widen, since insurers offered natural catastrophe sub-limits and lower deductibles.
Insureds were increasingly willing to accept long-term agreements (LTAs), generally offered with varied rate movements in the second or third year.
Not every risk moves at the same pace. EBM Insurance & Risk’s May market report found weather-exposed properties and clients with adverse claims histories still saw flat pricing or modest increases, and the broker expected the pace of softening to moderate in the second half.
Financial and professional lines pricing fell 8%, compared with an 11% decrease in the prior quarter. Capacity remained stable, rate discounting continued, and retentions and coverage improvements stayed negotiable, particularly where several insurers offered terms.
D&O insurers continued to raise rate concerns, but pricing trends persisted. Insurers showed renewed interest in multi-line deals and pursued in-scope target business, and LTAs were widely available on generally favourable terms.
The Federal Court’s April judgment in Southernwood v Brambles, which is subject to appeal, was described by MinterEllison as the first Australian shareholder class action in which the court found shareholders had suffered quantifiable loss.
Cyber rates fell 8%, compared with 6% in the prior quarter, and insurer appetite and capacity remained strong. Insurers offered wider coverage and pre-loss services to compete on more than premium.
Organisations with strong controls, low loss experience and well-developed incident response capabilities continued to achieve favourable outcomes. Underwriters remained focused on AI risk and the use of AI tools, particularly governance, data security, third-party dependencies and privacy-related exposures.
Regulators are looking at the same issues. APRA issued its first AI-specific expectations of boards and accountable executives on April 30, 2026, and ASIC followed on May 8 with an open letter on the cyber security risks of frontier AI models.
Ransomware and extortion remained the main severity drivers, particularly when incidents caused material business interruption and significant recovery costs. Law firms, healthcare providers and financial institutions faced heightened scrutiny over sensitive data, confidentiality obligations and growing reliance on AI-enabled workflows.
