Pacific Insurance Market Rates

Property rates decline for fourth consecutive quarter

Property insurance rates declined 9%.

• Property insurers actively sought new business and typically offered increased capacity on existing policies as competition continued into 2025.
• Incumbent underwriters primarily competed on price, with limited changes to retentions, limits, and coverages.
• Clients with larger limits were encouraged to request alternative retentions, limits, and program structures, generating greater competition for lead terms.
• Some clients are accepting long-term agreements (LTAs) for certainty on future rate movements.

Casualty rates decline as competition increases

Casualty insurance rates declined 2%, the second consecutive quarter of decline.

• Insurers competed on price, terms, and conditions as the market shifted to an increasingly competitive landscape.
• Larger accounts typically experienced significant improvements in terms.
• The approach to underwriting polyfluoroalkyl substances (PFAS) exposures continued to vary across territories and occupations.
• The challenging conditions in the US casualty market were reflected in Australian placements involving US-domiciled risks.

Financial and professional lines rates continue to decline

Financial and professional lines pricing decreased 10%.

• Rate decreases continued across most classes, but at a moderating pace compared to prior quarter.
• Rates for large directors and officers (D&O) liability programs have moderated from peak levels, allowing for retention adjustments.
  • Large D&O claims, such as shareholder class actions, remained.
  • Strong primary alternatives were generally available for large D&O programs.
• LTAs were commonly available.

Cyber insurance rates decline, capacity abundant

Cyber insurance rates decreased 8%.

• Rates trended down, albeit at a slower pace in the quarter.
• Claims notifications rose due to an increase in cyber incidents, with ransomware, extortion, and fraudulent funds transfers driving claims; long-tail liability claims impacted insurer loss ratios, particularly in the US.
• Insurers generally enhanced pre-loss offerings, with various risk management services available to policyholders in Australia and London.
• LTAs continued to be offered, with broad coverage remaining available.

Our rates reflect the segment mix of Marsh’s client portfolio.