Commercial rates in the Australia-dominated Pacific region fell 11% in the second quarter, the largest drop worldwide, the latest Marsh Global Insurance Market Index shows. 

The pace of decline – in the region’s sixth straight quarter of easing – accelerated from 8% in the preceding three months.

Property rates tumbled 13% amid high levels of insurer competition, leading to negotiable coverage terms, including increased limits and reduced deductibles.

Casualty rates fell 5%, with insureds enjoying greater choice as insurers competed on price and coverage for primary and excess placements.

Buyers with poor claims performance or challenging risk profiles may have had flat rates or slight increases, while US casualty challenges affected Australian placements with US-domiciled risks, Marsh says.

Financial and professional lines rates dropped 10% as a trend of double-digit drops continued. Pricing fell as much as 14% in the third quarter of last year.

Activity linked to large directors’ and officers’ liability claims, such as shareholder class actions, was lower than in previous periods, and long-term agreements were commonly available.

Cyber dropped 10%, with capacity abundant, and insurers sought innovate ways to differentiate offerings beyond rates. Some implemented cross-line approaches, seeking to participate in cyber programs if already involved in other lines.

Generative artificial intelligence is a focal point for insurers, but there has been no AI-specific broad exclusionary language and no significant claims activity.

Globally, commercial insurance rates fell 4% on average in the quarter following a 3% decline in the first three months.

“Mounting competition among insurers with ambitious growth targets is providing reduced pricing and broader coverage options,” global placement president John Donnelly said. “Against this backdrop, rising US casualty rates are a concern for clients.”

Mr Donnelly says as geopolitical issues including tariffs and conflicts create challenges and uncertainty, organisations can access many attractive traditional and alternative financing strategies to manage risks.

Worldwide, property rates declined 7% while casualty increased 4%, led by a 9% jump in the US due largely to the frequency and severity of claims, many characterised by so-called nuclear jury awards. Financial and professional lines fell 4% and cyber eased 7%

US rates were flat, while prices fell 6% in the UK, 4% in Canada and Europe, and 5% in Latin America and Asia.

The report is available here.