Australian commercial insurance rates recorded a double-digit fall for the sixth straight quarter in the July-September period, cratering 12% in Marsh’s latest market index.

The drop was led by a 14% decrease in property pricing as strong risk appetite drove competition for business, the global broker says.

Prices in the Australia-led Pacific region have now fallen for 11 consecutive quarters, according to the Global Insurance Market Index, Marsh’s measure of commercial rates at renewals.

The 12% September-quarter drop in Australia was more than double the 5% fall in global pricing and exceeded every market except for India, Middle East and Africa.

Marsh says Australian property rates remain competitive as insurers continue to expand capacity for new and incumbent business.

“Market conditions remained favourable for clients … with price the primary differentiator. Coverage also continued to broaden, with insurers offering natural catastrophe sublimits and lower deductibles.”

The drop in financial and professional lines pricing moderated to 8% following an 11% slide in the preceding quarter.

Marsh says directors and officers insurers continued to raise rate concerns, but pricing trends persisted as capacity stayed stable.

“Rate discounting continued across the market. Retention levels and coverage improvements remained negotiable, particularly where multiple insurers offered terms.”

In cyber, prices dropped 8% compared with 6% in the June quarter.

While appetite and capacity remained strong, insurers stayed focused on artificial intelligence risks and the use of AI tools.

“Organisations with strong controls, low loss experience and well-developed incident response capabilities continued to achieve favourable outcomes,” Marsh said.

Casualty rates slumped 11% in the September quarter – the steepest drop since prices started to spiral in the fourth quarter of 2024.

“Insurers sought to write profitable, higher-premium placements, which supported favourable outcomes. Local and international wholesale insurers sought to retain existing primary and excess business, and write new accounts.”

Marsh global placement president John Donnelly says the overall market is broadly unchanged, with continued rate pressure across most regions.

“A benign US hurricane season contributed to favourable underwriting results, helping sustain capacity and high levels of competition across much of the market,” he said.

“Reinsurance conditions improved further during the quarter, with strong insurer results and more favourable reinsurance terms supporting active market participation and adding to the availability of capacity across many lines.”

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