Globally, commercial insurance rates are decreasing at renewal, a trend which is holding true in Canada as well, according to the most recent Global Insurance Market Index (GIMI) reading from Marsh.
The proprietary measure of global commercial insurance rate changes at renewal is designed to provide insight into major insurance markets globally. Rates declined six per cent in the second quarter, the eighth consecutive quarter of reduced rates. Marsh says insurers extended favourable conditions to buyers across most regions and major product lines. Rates declined a comparable five per cent the previous quarter.
Property rates, often the largest single premium class for most corporate entities, declined by 12 per cent while casualty rates increased two per cent, driven largely by business in the United States.
“Positive insurer financial performance, a surplus of capital, lower reinsurance costs and higher investment returns have produced greater levels of competition and contributed to lower rates,” Marsh states in its announcement about the quarterly release. “In many markets, in addition to competing based on price, insurers were seeking to differentiate themselves through broader coverage, expanded policy terms and lower deductibles.”
They add that financial and professional lines and cyber rates also declined globally, although the pace of reductions has moderated.
In Canada, overall commercial rates declined seven per cent in the most recent quarter, following on the heels of a six per cent decline and another seven per cent decline in the two quarters prior.
