Global insurance rates continue their decline
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Global insurance rates across most major lines of business continued to decline during the second quarter of 2015, according to Marsh L.L.C.'s latest Global Insurance Market Quarterly Briefing, released Thursday.
Commercial insurance rates continue to decrease across the globe in most lines of business for the second quarter. The decrease, mainly due to an abundance of global capacity and a lack of large insured losses, marks the ninth consecutive quarter of rate declines, the report said.
Demand for transactional risk continued to grow with an overall increase of 15% year-on-year in terms of limits. Private equity firms were the heaviest users of the niche insurance area, seeing it as a way to reduce indemnity requirements when buying.
The Marsh Global Insurance Index was 0.956 in the first quarter of 2015, an improvement from 0.967 in the previous quarter.
Decreases in insurance rates were seen across regions and in most major lines of business, with Asia-Pacific experiencing the largest composite rate decrease, followed by Continental Europe, the U.K., Latin America, and the U.S., the report said.
In major coverage lines, property insurance showed a decline of over 5% on average. Rate decreases in major coverage lines occurred across all regions in the second quarter, and were led by Asia-Pacific and continental Europe, according to the report.
Casualty insurance rates, on average, decreased more moderately than property, ranging from flat to down 5% — a consistent trend across all major regions. Asia-Pacific had the largest decrease, followed by the U.K.
The report also examines the components of the insurance pricing environment: capital committed to the market, insurer profitability and insurer pricing methodologies.
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