Fourth quarter 2023 rates rose in US but flat in Asia, says Marsh

Insurance rates in the fourth quarter of 2023 in the US increased by 3%, while rates in Asia were flat, according to Marsh’s Global Insurance Market Index. In both regions, property rates rose and financial and professional lines rates decreased. In Asia, property insurance rates rose 2%, and insurers slowly increased their capacity in the region, Marsh said. Casualty insurance rates, on the other hand, declined 2%. “Casualty rates continued to prove generally favourable for clients in Asia, particularly those with localised exposure; however, those with North American exposure faced increased scrutiny,” said Marsh. It added that auto liability and workers’ compensation rates remained stable, while financial and professional lines rates declined 6%. D&O liability rates continued to decline, with increased insurer capacity available. Insurers generally limited primary capacity, but increased excess layers and showed more interest in historically difficult-to-place risks, such as US-listed companies. Cyber insurance rates were flat, with insurer competition continuing to accelerate, with rates stabilising and increased capacity typically available. But Marsh said underwriters increased scrutiny regarding dependence on digital supply chains and war exclusions. In the US, property insurance rates increased by 11%, driven by rising reinsurance and capital costs coupled with three years of strong demand, limited new capacity, and loss activity. Marsh said risks with limited natural catastrophe exposure and stable incumbent capacity typically experienced better results than did risks with losses and/or concentrations of assets in CAT zones, including the Gulf of Mexico, the Atlantic coast, and California. According to Marsh, clients generally retained more risk through increased deductibles, or through alternative risk transfer including captives, parametric, or structured solutions. Marsh said casualty insurance rates increased 3%, adding that casualty markets remained competitive, particularly for workers’ compensation. The broker noted that auto liability losses continued, with jury awards escalating. However, financial and professional lines rates decreased 6%, although the size of rate decline eased, especially for programmes that had received large decreases previously. Directors and officers (D&O) liability insurance for publicly traded companies declined 8%, with insurer competition remaining strong, while errors and omissions rates were flat. Cyber insurance rates in the US decreased 4% in the quarter, with capacity available, especially for excess programmes, and MGAs continuing to bring new capacity into the market. However, ransomware attacks increased in frequency, sophistication, and severity, and evolving privacy regulations also led to increased claims. “Catastrophic cyber risk is a significant concern for insurers and insureds; understanding and quantifying exposure to war and aggregated cyber incidents, together with the supply chain risks associated with each, is challenging, but essential,” said Marsh.

Fourth quarter 2023 rates rose in US but flat in Asia, says Marsh

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