Average global insurance rates decreased for the 18th consecutive quarter, although the rate of decline slowed in the third quarter (down 1.6 percent) as compared to the prior quarter (down 2.2 percent), according to broker Marsh’s Global Insurance Market Index for the third quarter of 2017.
Marsh reports that rate decreases slowed globally in the third quarter of 2017 across property and financial and professional lines. Global property rates declined, on average, by 1.7 percent in the third quarter compared to a decrease of 2.8 percent in the prior quarter. Financial and professional lines declined, on average, by 1.4 percent, compared to a 2.1 percent decrease in the previous quarter. Casualty rates remained unchanged from the second quarter (down 1.7 percent).
Rate movements varied by region, according to the Marsh index, which saw a higher rate of average decrease in the U.S., Continental Europe and Latin America in the third quarter as compared to the prior quarter. Average rates decreased in the UK and Asia in the third quarter, but at less pronounced levels than observed in the prior quarter. Rates increased in Australia for the third consecutive quarter.
Dean Klisura, president, Global Placement and Specialties at Marsh, said that the average rates declined globally “largely due to capacity in the marketplace and competitive underwriting.”
Klisura added that property damage and business interruption losses from the recent natural disasters in the U.S. and elsewhere had little to no impact on average rates in the quarter as they occurred late in the reporting period but “early indications are showing evidence of rate increases for U.S. catastrophe-exposed property risks.”
The Marsh Global Insurance Market Index is a proprietary measure of commercial insurance premium rate change at renewal, representing the world’s major insurance markets and comprising 90 percent of Marsh’s premium. The index captures a rolling four-quarter view of rate movement, providing a quarter-to-quarter look at changes in the marketplace. The rate change captures year-over-year rate movement, measured quarterly. The index and rate change metrics are based on a combination of statistical data and input from Marsh placement leaders worldwide.