Global insurance rates have declined by 2% in the fourth quarter of 2024, the second consecutive decrease in the composite rate following seven years of increases, according to the Q4 Global Insurance Market Index recently released by Marsh.
U.S. rates were flat, while “U.K. and Pacific regions again experienced the largest composite rate decreases, at 5% and 8%, respectively,” states the report. “Latin America and the Caribbean [as well as] the India, Middle East, and Africa (IMEA) region experienced composite rate increases.”
Global Product Line Trends
Property insurance rates globally declined by 3%, according to the report. The Pacific region experienced the largest decrease (8%), followed by the U.S. and U.K. (4%), and then Canada, Latin America, and the Caribbean, and Asia, which all saw low single digit decreases, the report states.
Casualty rates were the only major coverage line to show an increase on a global scale, rising 4%; however, this was a decrease compared to 6% the previous quarter. “U.S. casualty rates saw the largest increase at 7%, driven largely by excess/umbrella rates,” states the report. “Latin America and the Caribbean experienced a 5% increase, [while] all other regions ranged from 2% declines to 1% increases.”
Both financial and professional and cyber insurance rates decreased globally, with 6% and 7% declines seen in every region, respectively.
U.S. Insurance Rates Fall Flat
Property Rates Decline While Capacity and Competition Increase
Property insurance rates in the U.S. declined 4%, compared to a decline of 1% in the previous quarter, according to the report. However, “increased insurer capacity and competition were driven by strong financial performance in the property sector over the past three years, along with cost reductions and stable reinsurance structures.”
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Clients living in high-risk areas, such as the Gulf of Mexico, Atlantic coast, or California, experienced above-average rate decreases due to increased capacity and new capital, the report states. Clients also “scrutinized insurance costs and conducted cost-benefit analyses to assess self-insurance and alternative risk transfer solutions.” However, “clients with higher loss activity and poorer submission quality were likely to face less favorable renewal outcomes.”
Insurer interest in business increased in sectors including warehousing, food and beverage, and technical risk, which had seen significant rate increases over the past five years, according to the report. All in all, “the property market remains sensitive to loss events, particularly the ongoing Los Angeles wildfires, which will impact aggregate catastrophe losses in 2025.”
U.S. Casualty Rate Increases
U.S. casualty insurance rates increased 7% and, excluding workers’ compensation, the increase was 11%, the report states. “Workers’ compensation continued to be the primary casualty line of interest for most insurers; however, concerns continued regarding increasing reserves and rising medical costs.”
Meanwhile, auto liability continued to pose profitability challenges due to larger jury verdicts nationwide and rising damage costs, according to the report. General liability rates, however, “remained relatively stable, with average increases of approximately 3%. Loss activity in certain industry classes—including real estate, hospitality, and public entities—drove larger increases. Coverage restrictions continued to increase, including per-and polyfluoroalkyl substances (PFAS) exclusions, biometric restrictions, and cyber exclusions, with real estate and hospitality organizations seeing additional exclusions related to sexual abuse, human trafficking, and assault.”
In the umbrella and excess liability market, risk-adjusted rates increased 15% compared to 21% the previous quarter. “Clients with adverse loss development and exposure concerns typically experienced changes to limits, attachments, coverage, and/or pricing, with rate increases exceeding 30%,” according to the report. As a result, many clients sought alternative program structures such as captives and structured deals.
Some insurers capped individual risk capacity at a maximum of $15 million due to adverse developments in the U.S. litigation environment—even in jurisdictions previously viewed as favorable. There has been a shift away from concentrating capacity on a single tower due to “the frequency of severe claims, particularly in the auto liability market, where some insurers have raised auto attachment points for fleets of over 100 units.”
Furthermore, “Some insurers limited or excluded coverage for elements such as PFAS, biometric data, sexual abuse and molestation, endocrine disruptors, and geopolitical risks. Premises, once considered low-hazard risks, are now seeing poorer-than-expected claims outcomes.”
Financial and Professional Lines
Financial and professional lines rates decreased 3%, with directors and officers (D&O) liability rates declining 5%, states the report. “Pricing for D&O stabilized, with single-digit decreases in both primary and total program rates; the gap between primary and excess layer pricing narrowed.” Some insurers either opted out of renewals or reduced capacity due to an inability to renew at current premium levels. Fiduciary insurance rates, meanwhile, were generally flat.
Cyber Rates Decrease
“Cyber insurance rates decreased 5%,” according to the report. “There was an abundant capacity for both primary and excess cyber insurance programs, with additional new capacity anticipated in 2025.”
Claims volume increased in 2024, with over 2,000 claims in the U.S. related to privacy breaches, supply chain, and ransomware having been filed. While average ransom demands increased, the number of companies paying ransoms declined year over year, the report states.
Important themes surrounding cyber risk, according to the report, include “strong cybersecurity controls, resilience against ransomware threats, awareness of aggregation exposure and third-party risks, the impact of generative AI, and emerging privacy regulations.”