Q2 2024
Pacific rates decline, led by property and financial and professional lines
Insurance rates in the Pacific region declined 5% in the second quarter of 2024.
Pacific second quarter 2024
Pacific composite insurance rate change
Pacific property
Property rates decline for first time in over 7 years
Property insurance rates declined 4%, the first reduction since the fourth quarter of 2016.
- International and wholesale markets drove competition.
- Long-term agreements (LTAs) were being offered to some clients; some included reductions in year two.
- Small-to-medium sized property clients generally attracted less competition, with rates ranging from no change to 5% increase, on average.
- Claims-impacted and catastrophe (CAT)-exposed accounts typically continued to experience rate increases.
Pacific casualty
Casualty rates nearly flat
Casualty insurance rates rose 1%.
- Capacity and competition increased from new and existing markets.
- Underwriting scrutiny continued, particularly in areas such as contractor injury, US exposures, per- and polyfluoroalkyl substances (PFAS), and environmental, social, and governance (ESG).
- Insurers continued to monitor potential claims inflation from litigation trends, including worker/contractor injury claims in Australia that affected back years, particularly for insurers on mining and construction risks.
Pacific financial and professional lines
Financial and professional lines rates decline
Financial and professional lines rates decreased 12%.
- New market entrants contributed to an increase in capacity and competition.
- Rates for directors and officers (D&O) liability declined in the 15% to 20% range, on average.
- Financial and professional lines rates decreased, but not uniformly across the various product classes.
- Long-term agreements (LTAs) were offered to some clients.
Cybersecurity controls remain a key to rates
Cyber insurance rates declined 5%.
- Improved competition from insurers generally led to more coverage and retention options for clients, including increased limits, decreased retentions, and improved pricing for maintaining a similar policy structure.
- Insurers focus areas included supply chain risk, dynamic privacy regulations, and ransomware.
- Cyber physical damage cover was an area of increased interest for clients.
- Cyber limit quantification is increasingly seen as valuable in understanding an organization's cyber risk exposures.