In its second-quarter 2024 report, brokerage firm Marsh notes that insurer rates for covering commercial risks have not increased globally and have even decreased in the Canadian market. 

For the first time since Q3 2017—spanning 27 quarters or nearly seven full years—the composite index measuring changes in commercial insurance rates recorded no global increase. 

This Global Insurance Market Index, exclusive to Marsh, measures changes in commercial insurance rates at the time of renewal. 

“We have seen the continued moderation of the global composite rate over the past few years, with a stable composite in Q2 2024, which is a positive movement for our clients,” says Pat Donnelly, President, Marsh Specialty and Global Placement, at Marsh. 

By segment 

In its quarterly index update, released on July 24, Marsh attributes this rate stagnation to increasing competition among insurers in the property insurance segment. This sub-index remained unchanged in the second quarter. 

Insurers and their clients are closely monitoring the Atlantic hurricane season, as the vast majority of insured damages from these events occur in Q3. 

In liability insurance, Marsh reported a three per cent increase in this sub-index globally. This rate progression remained steady for the seventh consecutive quarter. 

In the financial and professional services sector, the decline in this sub-index continued for the eighth consecutive quarter, with a 5 per cent decrease in the last quarter. 

Lastly, the cyber risk insurance sub-index also saw a 6 per cent decrease in Q2 2024, mirroring the reduction in Q1. 

Regional variations 

Marsh divides its index composition into several territories. On average, the composite index rose by 4 per cent in Latin America and the Caribbean, as well as in the territory comprising Africa, the Middle East, and India. 

In the United States and Europe, the composite index increased by one per cent in Q2 2024. In the UK and Asia, the composite index decreased by three per cent. In Canada and the Pacific region, the index dropped by five per cent. 

In Canada 

In Canada, Marsh says that in property insurance, where the index fell by four per cent in the last quarter, the situation is explained by increased capacities among insurers both domestically and in international markets. 

In Canadian liability insurance, the index showed a five per cent decrease in Q2 2024. Improved offerings in general liability insurance explain this result, according to Marsh. 

However, for many business activities involving the delivery of products and services to the United States, the brokerage firm notes that underwriters are showing greater caution. 

Several significant jury awards recently granted for litigation south of the border are making insurers more cautious about the risk exposure of businesses operating in the United States. 

The rate decrease in the financial and professional services market was also five per cent in Canada last quarter. Notably, in directors' and officers' liability, the decline varied from five to 10 per cent depending on the sectors, due to the entry of new insurers into the market. 

In this regard, Marsh's report notes a more significant decline for small and medium-sized enterprises compared to large corporations, where rate reductions have been more moderate. 

Finally, for cyber risk, insurance rates in Canada dropped by an average of four per cent in Q2 2024. "New capacity and increased competition influenced excess layer premium reductions and contributed to overall program savings," explains Marsh. 

The broker Marsh, a company of the Marsh & McLennan group, had already noted an improvement in the Canadian market in the previous quarter.