(Bloomberg) -- Rates for global commercial insurance policies are declining for the the first time in seven years amid increased competition in the property market, according to a new study.
Average rates for all commercial policies fell 1% in the third quarter of the year, according to a study by Marsh, the insurance brokerage unit of Marsh & McLennan Cos Inc. It’s the first time average rates have declined since the third quarter of 2017.
“It’s good news for our clients,” Marsh Chief Executive Officer Martin South said in an interview. “They’ve suffered for a long time and really have been very frustrated by the state of the market.”
A combination of larger underwriting losses, persistently low yields and inflationary pressures has led global insurers to charge more, with rate increases reaching 22% in late 2020. Since then, insurance firms have progressively moderated their pricing, in part because of increased competition in the property market.
Property insurance rates fell 2% in the third quarter after being flat in the previous period. This was driven by above-average decreases in areas prone to natural disasters such as the Gulf of Mexico or California, after hefty increases in previous years. These declines occurred before hurricanes Helene and Milton wreaked devastation across the Southeast, however.
Average rates on cyber policies decreased 6% in the quarter, while those of financial and professional lines fell 7%. Casualty lines increased 6% amid concerns around large jury awards in the US.
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