The third quarter of 2015 saw commercial insurance rates declining globally in all regions and most lines of business with Asia Pacific topping the list, according to
Marsh’s Global Insurance Market Quarterly Briefing.
The UK and Asia-Pacific regions posted the largest composite rate decreases, followed by Continental Europe, Latin America and the US, respectively.
Property insurance showed the largest rate declines, with decreases averaging more than 5%. Asia Pacific showed the largest decrease, followed by Continental Europe and the US, with Latin America and the UK showing the smallest decreases regionally.
While casualty insurance rates decreased less than property rates on average, there were still average declines ranging between 2-4% across all major regions, again led by Asia Pacific and the UK.
Financial and professional lines of business presented mixed rate results during the period: while the global composite index for financial products decreased 5%, the US and Latin America both posted small increases.
This was largely due to cyber insurance, which increased in the US by more than 15% in the third quarter.
The average cyber insurance limit purchased grew in the third quarter, piercing the US$20 million level for the first time, data gathered by Marsh found.
Limits purchased were up more than 10% on average in the third quarter compared to the same period last year.
Stakeholders were working to better understand the exposures in the cyber arena, including both external and internal threats, in order to improve defences.
“Cyber is a unique exposure — it continues to evolve and it is clearly here to stay,” said Paul Denny, Marsh’s Northeast US FINPRO leader and US E&O leader.
“Organisations that understand the nature of potential threats and their exposure to cyber attacks will be best suited to develop a comprehensive risk management strategy to counter them.”
The potential of increasing segmentation could be explored with the benefit of more robust data sources, which could include company-specific information concerning both the motivation of potential attackers as well as a company’s ability to defend itself against attack, the report said.
