Global Insurance Markets Experience First Rate Decline in Seven Years
In the third quarter of 2024, global commercial insurance rates experienced a 1% decline, marking the first decrease in the composite rate in seven years, according to the Marsh Global Insurance Market Index. This marks a notable shift after a prolonged period of rising premiums, signaling changes in the insurance landscape globally.
Regional Breakdown of Insurance Rate Changes
Insurance rate movements varied significantly across different regions during Q3 2024, with some areas seeing decreases, while others experienced increases.
UK and Pacific Regions See the Largest Rate Decreases
The UK and the Pacific regions faced the most significant declines in composite rates. The UK saw a decrease of 5%, while the Pacific region experienced an even steeper drop of 6%. These regions have been grappling with market adjustments, which have impacted their insurance pricing.
US and Latin America/Caribbean See Rate Increases
Conversely, the US and the Latin America and Caribbean regions saw the highest increases in composite rates, both rising by 3%. These increases were largely driven by specific market dynamics, including shifts in demand and supply factors within these regions.
Global Product Line Trends in Q3 2024
Several key product lines experienced notable shifts in rates during the third quarter of 2024, with property, casualty, financial/professional, and cyber insurance all undergoing distinct changes.
Property Insurance Rates Decline
Globally, property insurance rates fell by 2% in Q3 2024. However, the movement varied widely by region, with some markets seeing larger declines than others. The property insurance market has been undergoing corrections, with pricing softening in many areas compared to previous periods of sharp increases.
Casualty Insurance Rates Increase
Casualty insurance rates saw an overall increase of 6% globally, with rates remaining relatively consistent across regions. The biggest changes occurred in the US, where casualty rates jumped by 10%, largely driven by excess/umbrella policies. This marks a significant trend in the casualty space, with some regions adjusting their pricing more significantly than others.
Financial and Professional Lines See Rate Decrease
Rates for financial and professional lines declined by 7% globally in Q3 2024, with decreases observed in all regions. This was one of the more uniform trends seen globally, as the financial and professional lines sector continued to soften in response to market conditions.
Cyber Insurance Rates Continue to Decline
Cyber insurance rates decreased by 6% globally in Q3, continuing a trend from previous quarters. Declines were seen in every region, reflecting a broader stabilization in the market as the demand for cyber insurance continues to evolve.
Key Takeaways from Q3 2024 Insurance Market Trends
Overall, the third quarter of 2024 saw significant regional and product line variations, with some areas experiencing price declines while others faced increases. The global composite rate decrease marks a turning point after seven years of overall rate hikes. Moving forward, it will be important for businesses and insurers alike to stay attuned to the evolving market conditions to navigate these changes effectively.
Note: All referenced rate changes are averages, and percentages are rounded to the nearest whole number.
