Reinsurance buyers will see continued firm pricing at upcoming renewals, while primary insurance rate hikes persist, top executives at Marsh & McLennan Cos. Inc. said Thursday as the brokerage reported its net income jumped 34% in the third quarter.

Elevated catastrophe losses will drive continued underwriting discipline in property catastrophe reinsurance, but the market is expected to be more stable at Jan. 1 renewals, with adequate capacity and increased reinsurer appetite, they said on an earnings conference call.

In casualty reinsurance the market is more cautious as reinsurers assess prior-year loss development and inflation, but capacity is expected to remain stable, the executives said.

“The cost of risk is rising,” said John Doyle, Marsh McLennan president and CEO, on the call with analysts.  

Primary insurance rate increases continued in the third quarter, with the Marsh Global Insurance Market Index up 3% overall, in line with the second quarter, Mr. Doyle said.

Marsh McLennan reported third-quarter revenue of $5.38 billion, up 13% overall and 10% on an underlying basis over the same period in 2022. Net income jumped 34% to $730 million.

Marsh LLC, its main brokerage arm, reported $2.70 billion in revenue, up 9% overall and 8% on an underlying basis.

Marsh’s business in the U.S. and Canada logged $1.56 billion in revenue, up 8% overall and 6% on an underlying basis. Its Europe, Middle East and Africa business reported $692 million in revenue, a 13% increase overall and up 9% on an underlying basis.

Asia-Pacific revenue was $311 million, up 9% overall and 10% on an underlying basis, while Latin America revenue totaled $134 million, up 14% on both an overall and underlying basis.

Growth was strong across the board in North America and internationally, though there was some moderating growth in financial, construction and cyber lines, reflecting pricing pressures, said Martin South, president and CEO of Marsh.

Reinsurance brokerage arm Guy Carpenter & Co. LLC reported $359 million in third-quarter revenue, a 9% increase overall and up 8% on an underlying basis.

Mr. Doyle said there are concerns both in the insurance and reinsurance markets about rising loss costs.

Property catastrophe reinsurance buyers can expect pricing to remain firm and vary by region, said Dean Klisura, president and CEO of Guy Carpenter.

“It won’t be what we saw last year in the U.S. and in Europe, but we do think that firmness will be there,” he said.

“We do expect additional capacity and an increased appetite from reinsurers to write more business, particularly at higher attaching property/cat layers,” he said.

In meetings this fall, reinsurers expressed concerns with prior-year loss development in U.S. casualty in certain lines driven by economic and social inflation, he said.

“We do expect some downward pressure from reinsurers on ceding commissions for our clients with quota share contracts in certain casualty lines,” but capacity is expected to remain adequate, Mr. Klisura said.

Property insurance rates increased 7% in the quarter compared with 10% in the second quarter and casualty pricing was up in the low-single-digits range, Mr. Doyle said. Cyber insurance pricing decreased modestly after several years of increases, he said.

Workers compensation rates increased slightly, while financial and professional liability insurance rates were down mid-single digits.

“We’re in the 24th consecutive quarter of rate increases,” based on Marsh’s index, Mr. South said. “I don’t think we’re at an inflection point when it comes to pricing,” he said.