Global Insurance Market Quarterly Briefing – November 2014
The Marsh Global Insurance Index reflected a sixth consecutive quarter of rate decreases, but the slide in rates has accelerated since the beginning of 2014.
Primary insurers have been able to become more competitive due to reductions in the cost of treaty reinsurance as a consequence of increased levels of reinsurance capacity and a lack of natural catastrophes.
The Marsh Global Insurance Index showed an overall rate change of -2.8% for the third quarter of 2014, compared to the third quarter of last year. Although this marks the sixth consecutive quarter of rate decreases, the slide in rates has accelerated from the beginning of the year, with several noteworthy regional and line-of-business variations. According to the report:
- Property rate levels showed the largest decreases globally, while casualty and financial products lines were more stable overall.
- Insurance capacity has been on the rise, and what has changed most dramatically is the ability and willingness of buyers to access it globally.
- Prices for insurers to transfer risk have been extremely favorable, a trend that is driving competition among insurers to write more business.
- Current rate levels are typically 5% to 10% lower for business that has moved to a new insurer compared with renewal policies that stay with an incumbent.