What is going on here?
Global commercial insurance premium rates have fallen by 1% for the first time in seven years, thanks to fierce competition in the real estate market, according to a new report from Marsh.
What does this mean?
Marsh’s Global Insurance Market Index shows major changes in the insurance industry. After seven years of increases, competition in the global real estate market caused commercial insurance premium rates to fall by 1% in the third quarter of 2024, providing much-needed financial relief to businesses. Specifically, the non-life insurance sector declined by 2%, contrasting with the historical stability or growth in this sector. Financial and professional sectors were down 7%, and cyber insurance was down 6% globally. Interestingly, property and casualty insurance increased by 6%, marking the eighth consecutive quarter of growth. Marsh’s president of specialty and global placements sees these declines as a “positive development” for clients and could impact global insurance strategies.
Why should we care?
For the market: a breath of fresh air.
Changes in insurance premium rates are creating new opportunities for businesses around the world, particularly in regions such as the Pacific region and the United Kingdom, where premium rates have fallen by 6% and 5%, respectively. This trend indicates potential market softening, leading to more competitive pricing and consumer choice, and greater economic flexibility.
The big picture: rebalancing the insurance market.
Continued adjustments in global insurance rates, particularly notable declines in the cyber and financial sectors, signal a broader economic readjustment. These changes are driving innovation and change in risk management strategies and are likely to impact how businesses around the world prioritize and mitigate risk.
