Insurance rates in most major regions including Latin America, Asia-Pacific, the UK and continental Europe declined modestly in the second quarter of 2013, while rates in the U.S. rose moderately, according to insurance broker Marsh’s latest Global Insurance Market Quarterly Briefing.
Outside the U.S., rates typically dropped between one percent and three percent, resulting in a decline in the Marsh Risk Management Global Insurance Index for the first time since its inception six quarters ago. The index represents a composite average of global rate change activity over the preceding four quarters.
The U.S. was the only region in the global index to show an increase of rates on renewal, with a rise viewed across all lines of business of 1.6 percent, Marsh reported. Rate increases were most prevalent in professional liability and financial institution liability lines, which renewed on average flat to up 10 percent in the quarter. Marsh said clients renewing their directors and officers liability (D&O) in the quarter typically saw flat to 8 percent increases in rate.
Financial institutions in parts of the Eurozone also saw liability rate increases during the second quarter, with rates up on average between 10 percent to 20 percent in Italy. Rates typically renewed flat to up 10 percent in France and Spain.
Marsh said that increased competition among insurers, increased capacity and low catastrophe losses caused property insurance rates to fall or remain stable across all regions in the quarter.
“Despite rate increases in several lines of business in the U.S., insurers are competing aggressively for profitable business, and the market continues to experience an influx of new capacity,” said Dean Klisura, Marsh’s U.S. Risk Practices and Specialties leader. “All of this is resulting in generally favorable market conditions for most clients.”
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