Australian commercial rates fell 13% in the second quarter, marking the largest reduction since prices began contracting at the start of 2024, Marsh’s latest market tracker shows.

The Pacific region – led by Australia – recorded its 10th straight quarter of declines, and the fall was more than double the global decrease of 6%.

 

 

“Current market conditions are likely to persist absent a severe northern hemisphere storm season or string of major natural catastrophes,” Marsh Risk global placement president John Donnelly said.

“This is likely to create additional opportunities for clients to improve coverage and refine program design that may better position them for future market changes.”

By line, property led the Pacific market’s decline, recording a 15% fall after dropping 14% in the previous three preceding quarters, according to the Marsh Global Insurance Market Index.

 

 

The drop was the largest since property rates began to crater in the second quarter of 2024.

"We are seeing a continuation of increased competition and more capacity being offered," Marsh Risk Pacific head of property Jamie Coghlan told insuranceNEWS.com.au.

"We have a supply and demand imbalance, with more capacity being offered than is needed.  There is a reason for that: Australian property portfolios are profitable – this is attracting new entrants and those in the market are wanting to grow their business."

Casualty pricing tumbled 10% in Q2 – its biggest drop since rates began a downward trend in the fourth quarter of 2024.

Marsh says competition for casualty business was high as insurers pursued growth.

Pricing for financial and professional lines tanked 11%, extending the line’s run of drops to 13 straight quarters.

“Clients saw rate reductions and improved policy structures,” Marsh said.

Marsh says cyber rates dropped 6% amid ample capacity, as insurer appetite remained strong despite increased claims frequency.

“Ransomware and extortion remained key severity drivers,” the broker said.