The property insurance sector continued to benefit from the relative lack of large, high-impact natural catastrophes in the third quarter, allowing the sector to remain competitive and pass on rate reductions at renewal.
Although the recent Pacific hurricane, Patricia, which slammed into the Mexico coast, was the strongest hurricane ever recorded in the Western Hemisphere, initial reports indicated that insured loss levels are unlikely to be high, according to global insurer
Marsh.
“Without the near-term catalyst that larger wind or earthquake events have historically provided, the property rate environment continues to be competitive with most accounts typically seeing rate decreases at renewal,” said Nick Holmes, Marsh’s head of placement for Continental Europe.
Marsh’s quarterly index revealed that the third quarter of 2015 experienced commercial insurance rates declining globally in all regions and most lines of business, with renewal rates decreasing in all regions, contributing to a 4.8% global composite decline.
“Ample capacity and a low level of catastrophic loss activity accounted for healthy underwriting results and satisfactory combined ratios for insurers,” said Marsh.
Among the major coverage lines, property insurance showed the largest rate declines, with decreases averaging more than 5%.
