Pacific commercial rates down 8% in Q1 2025

Marsh recorded declines across all major lines of business.

The commercial insurance rates in the Pacific region dipped 8% in the first quarter of the year, according to Marsh’s latest Global Insurance Market Index.

Property insurance rates declined 9% as competition intensified. Insurers pursued new business and offered increased capacity on existing policies. 

Pricing was the primary focus amongst incumbent underwriters, with minimal changes to retentions, limits, and coverage terms. 

Clients with higher coverage limits were encouraged to restructure programs to drive competition. Some opted for long-term agreements (LTAs) to secure more predictable future pricing.

Casualty insurance rates fell 2%, marking the second consecutive quarter of decline. Insurers competed on pricing, terms, and conditions, with larger accounts seeing significant improvements.

Underwriting practices for exposures to polyfluoroalkyl substances (PFAS) continued to vary by region and industry.

Australian placements involving US-based risks reflected ongoing challenges in the US casualty market.

Financial and professional lines saw a 10% decline in pricing. Although rate reductions persisted across most classes, the pace slowed compared to the previous quarter. 

Directors and officers (D&O) liability program rates have eased from prior peaks, enabling adjustments to retentions. 

Shareholder class action claims remained a key factor in the space. Strong alternatives were generally available for large D&O placements, and LTAs were commonly offered.

Cyber insurance rates dropped 8%. Whilst the rate of decline slowed, claims notifications increased due to a rise in ransomware, extortion, and fraudulent funds transfer incidents.

Long-tail liability claims in the US continued to affect insurer loss ratios. In response, insurers enhanced pre-loss services and risk management support, particularly in Australia and London. Broad coverage and LTAs remained available.