Global insurance rates decline in first quarter of 2014: Marsh

Global insurance rates declined in the first quarter of the year, mainly driven by softening property rates, Marsh said in its Global Insurance Market Quarterly Briefing, released this week.

Rates tracked by the Marsh Risk Management Global Insurance Index declined for the fourth consecutive quarter and it is now at its lowest level since the third quarter of 2012, the firm reported.

Strong competition, ample capacity and a lack of major events contributed to the property insurance rate decline across all major regions during Q1, Marsh said.

The United States and United Kingdom had their largest quarterly decline in more than two and a half years (2.5% and 5%, respectively) while in Asia-Pacific, rate reductions of up to 20% were widespread for commercial business, in some cases nearing 25%, depending on the size of the risk, Marsh said.

Latin America recorded the largest average property renewal rate reduction among major global regions, at 7.6%, according to Marsh.

Casualty rates were generally stable during Q1, with decreases experienced in Latin America, Asia-Pacific and the United Kingdom, while the United States and Europe saw a slight increase, Marsh noted.

“The first quarter saw marked evidence of additional capacity flowing into the global market, primarily from existing players looking to increase their market share in particular lines of business or growing territories,” David Batchelor, president of Marsh’s International Division said in a press release.

“And continuing competitiveness in the reinsurance market also added fuel to pricing reductions in primary markets,” he added.

For professional liability, rates were stable in general, and flat or declining by up to 10% in Australia, France, Germany, India, and Korea, depending on the quality of the risk, Marsh said.