Global insurance rates trended downward at the end of 2013, driven by average pricing declines in all regions except the US, according to Marsh’s latest Global Insurance Market Quarterly Briefing. Overall rates tracked by the Marsh Risk Management Global Insurance Index in the fourth quarter fell in the UK, Continental Europe, and most significantly in the Asia-Pacific region and in Latin America. The US was the only region in the global index to show a rise in overall rates.
The market saw lower rates for global property programmes renewing in the fourth quarter, though by a smaller magnitude than in the previous quarter, according to the briefing. In Latin America, the typical rate reduction on renewal approached 10%, driven by competition and available capacity, along with acceptable loss experience. The Asia-Pacific region also saw decreases in property rates averaging 5% as an abundance of capacity across the region, particularly in Asia, kept rates low for non-catastrophe-exposed risks.
Globally, casualty insurance programmes typically renewed with a slight decrease, led by falling rates in Asia-Pacific, Continental Europe, and Latin America; while falling financial and professional liability rates in Asia-Pacific, the UK, and Continental Europe led to an overall decline in rates for those programmes globally.
“Strong capital positions, plentiful capacity, and ample competition within the global insurance industry are leading to favourable conditions for clients, especially those with well-managed risks,” said David Batchelor, president of Marsh’s International Division. “In the US, insurers are competing aggressively for profitable business and new entrants are helping to moderate any rate increases,” added Robert Bentley, president of Marsh’s US and Canada Division.
Among other findings from the report:
Global aviation insurance rates significantly declined at the end of 2013, with most airlines renewing with decreases between 15% and 20%.
Rates for catastrophe-exposed property risks in Japan remained largely stable through 2013, albeit still at levels 30% to 50% higher than before the 2011 Tohuku Earthquake.
Directors and officers liability rates for financial institutions across the Eurozone either fell or remained stable in the fourth quarter, with the exception of Italy and France, where rates were up 10% to 20% on average.
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