Australia commercial insurance pricing rose 5% in the three months to September, marking the seventh straight quarter of slowing premium rate growth, according to the latest Marsh Global Insurance Market Index.
Pricing globally also increased at a weaker pace, by 6% after chalking a 9% rise in the June quarter, according to the index.
The pace of rate increases in the Pacific market, in which Australia makes up 80% of business for Marsh, have been moderating since last year after several quarters of record-breaking rises.
Pricing went up 7% in the preceding June quarter, 10% in the first three months of the year and 13% in the December quarter of last year.
The property line, one of three classes monitored by the quarterly index, recorded marginally weaker pricing growth of 4% from 5% in the prior quarter.
Marsh says the NSW/Queensland floods earlier this year have increased insurers’ focus on storm/flood risk mitigation, deductible adequacy, and sub-limits. The NSW/Queensland catastrophe has led to insured losses of at least $5.45 billion, making it the costliest flood catastrophe in Australia.
“Underwriters continued to focus on general catastrophe and secondary catastrophe perils,” the broker says.
“Commitment to continual risk improvement is critical to renewal success. Insurers also focused on current valuations supporting declared values.”
In the financial and professional lines space, pricing increases also moderated, to 4% from 6% in the prior quarter.
Marsh says within this space, directors’ and officers’ (D&O) pricing declined for the second quarter after falling 5% in the prior June quarter. The June rate decline marked the first contraction in D&O pricing since 2017.
However cyber remains challenging despite signs of stabilisation seen during the quarter as insurers seek to growth their business. Marsh says ransomware continued to dominate the claims environment.
In the casualty space, pricing growth moderated to 10% from 11% in the June quarter.
Marsh’s Global Insurance Market Index is the broker’s proprietary measure of global commercial insurance premium pricing change at renewal.