Pacific: Property rates stay flat in 4Q2023, for first time in 26 quarters
Source: Asia Insurance Review | Mar 2024
Composite insurance rates in the Pacific region (of which Australia is the biggest market) were flat in the fourth quarter of 2023, according to Marsh’s 4Q2023 Global Insurance Market Index released earlier this week.
The report also highlighted the following trends in the Pacific in 4Q2023:
Property insurance rates were flat
The last quarter of 2023 marked the first time in 26 quarters that average property rates did not increase.
- Loss-impacted and catastrophe (CAT)-exposed insureds typically experienced rate increases.
- Insurer competition and capacity increased.
Pace of increases in casualty rates continues to decline
Casualty insurance rates rose by 4%.
- Insurers deployed new capacity and restructured programs, contributing to improved results and increased options for buyers.
- Underwriting scrutiny continued, particularly in areas such as contractor injury, US exposures, polyfluoroalkyl substances (PFAs), and environmental, social, and governance (ESG).
D&O rates continue to decline
Financial and professional lines rates decreased by 5%.
- Directors and officers liability rates decreased, with many clients experiencing declines of 15% or more.
- Competition remained strong for primary and excess layers from both new insurers and legacy carriers.
- Insurers are monitoring claims trends related to the use of generative AI.
Cyber insurance rates continue to moderate
Cyber insurance rates were flat.
- Cyber rates moderated significantly, with rollover of rates at renewal becoming the norm.
- Increased competition from insurers typically opened up additional options for clients.
- Insurers’ focus areas included catastrophic risk, dynamic privacy regulations, and ransomware.
- Underwriters typically sought detailed risk information, particularly regarding the ability of clients to mitigate ransomware threats. A