Australian commercial cover pricing contracted by 12% in the fourth quarter of last year – the largest drop among eight regions monitored in Marsh Risk’s Global Insurance Market Index.

The fall, following an 11% decline in the September quarter, was the steepest since Pacific rates started to decrease in the first three months of 2024.

Globally, rates fell for the sixth straight quarter, with Marsh Risk’s composite index down 4% – similar to the two preceding quarters.

“The global insurance market has been characterised by ample capacity across most lines and regions over the last six quarters,” Marsh Risk global placement president John Donnelly said. 

“In the absence of unforeseen circumstances, we expect this trend to continue throughout 2026. This year, clients have the opportunity to secure reduced premium rates and negotiate broader terms, which may include improving the resilience of their programs to cater for the increasing complexity of risks.”

Property rates in the Pacific region, which is dominated by Australian business, recorded the sharpest drop globally, down 14% after a similar fall in the third quarter.

Marsh Risk says the decline was driven by insurer competition.

“International insurers provided capacity that contributed to rate declines. The largest rate reductions occurred in distressed sectors with historically high rate increases and capacity limitations.”

In Pacific casualty, prices fell 9% – the fifth straight quarter of decline – while financial and professional lines rates decreased 8%, continuing a drop-off that started in the second quarter of 2023.