Commercial insurance rates decline for 18th consecutive quarter
The third quarter of 2017 was the 18th consecutive quarter in which average commercial insurance rates declined globally, according to Marsh's latest Global Insurance Market Index.
The rate of decline slowed in the third quarter (down 1.6 percent) as compared to the prior quarter (down 2.2 percent).
The report added that the losses from the recent natural catastrophes in the US and elsewhere occurred late in the reporting period, and hence had no impact on the rates.
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).
According to the Global Insurance Market Index, rate movements varied by region. A higher rate of average decrease was observed in the US, 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. At the same time, rates increased in Australia for the third consecutive quarter.
Dean Klisura, president, global placement and specialties at Marsh, said that average rates continued to decline globally, largely due to capacity in the marketplace and competitive underwriting.
"It is worth noting that property damage and business interruption losses from the recent natural disasters in the US and elsewhere had little to no impact on average rates in the quarter as they occurred late in the reporting period. Early indications are showing evidence of rate increases for US catastrophe-exposed property risks," Klisura said.
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