Australia leads way on commercial rate rises

Commercial lines premiums grew fastest in Australia in the second quarter, averaging 13.7%, according to broker Marsh’s Global Insurance Market Index. Financial and professional liability pricing rose 23.3%, with directors’ and officers’ (D&O) cover producing the biggest rise amid a challenging claims environment and reduced capacity. Financial institutions pricing was up 20-25% on average after several large losses and the fallout from the Hayne royal commission on financial misconduct. Casualty and property, the two other major lines, gained 5.7% and 12.5% respectively in the June quarter. Global commercial rates grew for the third consecutive quarter, underpinned by Australia and the UK. The market index – a measure of commercial insurance premium change at renewal – climbed to 0.892 points from 0.89 points in the previous quarter, with prices up 1.2%. Global property rates grew 2.3% as last year’s catastrophe losses continued to affect the market. Casualty declined 1.4% and financial and professional increased 3.3%, driven by higher D&O pricing in multiple regions.