Insurance broker and risk advisor Marsh, a business of Marsh McLennan, published its Global Insurance Market Index showing that global commercial insurance rates increased by two per cent in the fourth quarter of 2023, the 25th consecutive quarter of rate increases, the company stated in its announcement about the publication’s release. In Canada, casualty rates declined, with the exception of auto liability, they add.
“Rates continued to be relatively consistent across almost all regions in Q4,” the company , adds saying this was largely driven by pricing decreases in financial and professional lines, a small decrease for rates in the cyber insurance market, and increased competition offsetting the impact of strong demand and ongoing losses in property.
Cyber insurance rates
Global property insurance rates were up six per cent following a seven per cent increase in the previous quarter. Casualty rates increased three per cent, the same as in the previous four quarters, they add. “For the sixth consecutive quarter, the overall average pricing for financial and professional lines fell,” they state. “Globally, cyber insurance rates decreased by three per cent, compared to a two per cent decrease in the prior quarter.”
In Canada, property insurance rates rose two per cent, driven by catastrophe exposures. “Certain classes of business – including recycling, forestry, food and warehousing – faced more difficult renewals,” the report states. Casualty insurance rates in Canada decreased one per cent with heavy industrial, energy risks and those with United States or transportation exposures generally experiencing higher rate increases.
Financial and professional lines
“Insurer exclusions and sub-limits were common, depending on the class of risk,” they add. Financial and professional lines rates declined four per cent. Cyber insurance rates in Canada increased three per cent.
In cyber, they say new capacity entered the market in 2023. “Coverage generally continued to broaden, including the removal of coinsurance requirements and increasing sub-limits for coverage enhancements,” they state. “Insureds with improved cybersecurity controls were generally in a stronger position to negotiate lower retentions.”