Q4 commercial insurance rates up 2%, 25th straight quarterly increase: Marsh

Global commercial insurance rates increased by 2% in Q4 of 2023 (down from a 3% increase in Q3), marking the 25th consecutive quarter of rate increases, according to Marsh’s Global Insurance Market Index.

Marsh observed that rates were again “relatively consistent” across almost all regions in Q4, largely driven by a continuation of the trend for pricing decreases in financial and professional lines and a small decrease for rates in the cyber insurance market.

The firm also found that moderating rate increases for property risks contributed to the quarter’s results, with increased competition offsetting the impact of strong demand and ongoing losses.

“On average, rates in Q4 were flat in the UK, Canada, Asia, and Pacific. Rates increased in the US by 3%, in Europe by 4%, in India, Middle East & Africa by 4%, and in Latin America and the Caribbean by 8%,” Marsh said.

Elsewhere, global property insurance rates were up 6%, on average, in Q4 of 2023, a slight fall from the 7% increase in the previous quarter. Casualty insurance rates increased by 3% in Q4, the same as the previous four quarters.

As per the Global Insurance Market Index, the overall average pricing for financial and professional lines fell for the sixth consecutive quarter.

Meanwhile, reportedly driven by rate reductions and increased competition for business, average rates decreased by 6% in Q4, the same as the previous quarter.

Turning to cyber, global insurance rates in this sector decreased by 3%, compared to a 2% decrease in the prior quarter, marking only the second quarter to record an average decrease since 2018.

Marsh said that insurers in most regions “remain concerned” about the impact of inflation on asset values and claims costs during renewal discussions.

Pat Donnelly, President, Marsh Specialty and Global Placement, Marsh, commented, “At a time of much global economic uncertainty, clients will welcome the increased stability in insurance rates – especially for property exposures – and increased competition from insurers for well-managed risks.

“With 2024 set to be a year of significant geopolitical and economic challenges, we are working closely with clients to develop solutions that will enable them to become more resilient to global events and to take advantage of improving market conditions.”

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