A trend toward stable or even declining U.S. commercial property insurance prices should carry over from last year into 2014 if capacity remains plentiful and catastrophe losses stay relatively low, according to a report released Friday by Marsh L.L.C.

Last year's competitive general liability market for favorable risks driven by available capacity should also continue into this year, the report says.

But terrorism risk and insurance will be a significant factor this year with expiration of the Terrorism Risk Insurance Program Reauthorization Act scheduled for Dec. 31, says Marsh L.L.C. in “U.S. Insurance Market Report 2014.”

“Many organizations face uncertainty now, and the cost of property terrorism insurance could become volatile if TRIPRA is not reauthorized,” the report says.

A significant surplus of capital among property insurers and reinsurers kept competition high in 2013, leading to stabilizing prices and even declines for many organizations, the Marsh report says.

Workers compensation remains a challenging area for both buyers and insurers, as claim costs rose in 2013 and may do so again this year for many organizations, according to the report. But, the report says, with the overall competition in the property/casualty market, organizations that can demonstrate superior risk profiles should obtain the best results.

New insurers in the umbrella and excess markets increased capacity in 2013, with competition helping stabilize rates. That trend is expected to continue into 2014, the report says, with some exceptions in higher-risk areas such as the energy, chemical, life sciences and construction industries.

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While primary directors and officers insurers sought rate increases as 2014 began, competition from excess insurers offset those attempts, the report said. Meanwhile, as awareness of cyber risk grows, cyber insurance is gaining popularity among small and midsize companies, with insurers beginning to adopt a “per record” approach to the coverage, the report says.

Rates for employment practices liability coverage firmed in 2013, particularly for small to midsize employers, according to the report.

The marine market hardened in 2013, a trend that's expected to continue in 2014 with premium increases between 5% and 20% for buyers with good loss histories.

Superstorm Sandy and a few major cargo losses affected the cargo and stock throughput markets last year, according to the report, leading insurers to require more underwriting data and details on shipping routes and potential accumulations of value onboard ships, at ports and at consolidation points.

The captive insurance market is expected to grow in 2014, the report says, with interest in using captives to cover nontraditional exposures such as cyber liability and supply chain risk.

Medical stop loss and multinational pooling arrangements also are appearing more frequently in captives, it says.

Marsh's report can be found here.