Asia’s commercial insurance market experienced a 3% decline in rates during the fourth quarter of 2024 (Q4 2024), according to the latest Global Insurance Market Index from Marsh. This marks the fourth consecutive quarter of falling rates, though the pace of decline slowed compared to the 4% drop in Q3 2024.
The reduction was driven largely by property insurance, which saw a 3% decrease as insurers targeted companies with strong risk management practices in an effort to expand business. While this contributed to lower rates across most sectors, businesses impacted by losses were still approached with caution.
In response to rising risk appetite among insurers, capacity increased in certain segments, especially those with limited exposure to natural catastrophes. These areas saw larger reductions in rates. At the same time, clients were increasingly exploring alternative risk transfer options, such as parametric insurance and captives, as they reevaluated their program structures.
Casualty insurance rates also dropped by 1%, with companies that had no losses benefiting from competitive London market capacity seeing rate reductions of 5% to 10%. Capacity remained stable, with new market entrants focusing on North American exposures. However, businesses with significant North American exposure faced higher insurance costs, particularly for primary and umbrella coverage.
Despite an uptick in claims related to workers’ compensation and auto liability, overall casualty rates held steady. Insurers also continued to address risks associated with per- and polyfluoroalkyl substances (PFAS).
The most significant decrease was seen in financial and professional lines insurance, where rates dropped by 9%. This decline was driven by intense competition for renewals, amid limited capital market activity. Directors and officers (D&O) liability insurance, particularly in China, saw the steepest reductions, with average decreases ranging from 20% to 25%. Other regions experienced more moderate declines compared to the previous quarter.
New market entrants continued to expand their portfolios, while rates for financial institutions and professional indemnity insurance remained stable.
Cyber insurance also saw notable reductions, with rates falling by 11%. Increased competition among insurers contributed to the drop, although high-severity, low-frequency ransomware claims continued to contribute to portfolio volatility.
On a global scale, commercial insurance rates decreased by 2% in Q4 2024, following a 1% decline in Q3 2024. This represents the second consecutive quarterly decrease after a seven-year period of rising rates, a trend fueled by intensified competition in commercial property insurance, slower increases in casualty rates, stabilizing pricing in financial lines, and further reductions in cyber insurance rates.
Related topics
