Commercial insurance rates dip 3% in Q4 2024

Financial and professional lines declined the fastest at 9%.

Asia’s commercial insurance rates in the fourth quarter of last year (Q4 2024) registered a slower decline of 3%, compared to the 4% in the previous quarter, according to the Global Insurance Market Index released by Marsh. 

This is the fourth consecutive quarter of decline.

Property insurance rates in Asia declined by 3% as insurers sought to expand business with companies demonstrating strong risk management. 

This contributed to lower rates across most segments, though loss-impacted businesses were assessed cautiously. 

Increased risk appetite amongst insurers led to greater capacity in certain segments, particularly those with less exposure to natural catastrophes, which saw higher rate reductions. 

Clients also explored alternative risk transfer solutions, such as parametric insurance and captives, as they reassessed program structures.  

Casualty insurance rates, likewise, fell by 1%. Companies without losses and benefiting from competitive London capacity saw rate decreases of 5% to 10%. 

Available capacity remained stable, with new market entrants focusing on North American exposures. 

Businesses with significant exposure to North America faced rising insurance costs due to increased rates on primary and umbrella coverage. 

Despite rising claims in workers' compensation and auto liability, overall rates remained steady. Insurers also continued addressing risks associated with per- and polyfluoroalkyl substances (PFAS).  

Financial and professional lines insurance rates in Asia declined by 9%, driven by strong competition for renewals amidst limited capital market activity. 

Directors and officers (D&O) liability insurance had the largest impact on rate reductions, with China seeing average decreases of 20% to 25%.

Other countries recorded lower declines compared to the previous quarter. 

New market entrants continued expanding their portfolios, whilst rates for financial institutions and professional indemnity insurance remained stable.  

Cyber insurance rates in Asia dropped 11% as competition amongst insurers increased.

High-severity, low-frequency ransomware claims contributed to continued portfolio volatility.

Globally, commercial insurance rates declined by 2% in Q4 2024, following a 1% drop in Q3 2024.

This marks the second consecutive quarterly decrease after seven years of rising rates, driven by intensified competition in commercial property insurance, slower casualty rate increases, stabilising financial lines pricing, and further reductions in cyber insurance rates.