By David Bull

Jan 30 - (The Insurer) - The latest Marsh Global Insurance Market Index decreased by 2 percent in the fourth quarter compared to a 1 percent decline in the third quarter, with property rates declining 3 percent but casualty rates up 4 percent, led by US excess casualty with increases of around 15 percent.

The update was revealed by Marsh McLennan CEO John Doyle on the intermediary’s earnings call this morning after it beat with adjusted fourth quarter earnings per share of $1.87 (consensus: $1.75) and reported organic growth of 7 percent for the period.

On the call, Doyle noted that the overall decrease in the index came despite an elevated risk landscape, with 2024 insured natural catastrophe losses of almost $130bn, the fifth consecutive year where the industry total has topped $100bn.

The 3 percent decline in global property rates was up from 2 percent in the third quarter of last year.

Global financial and professional liability rates were down 6 percent, while cyber decreased 7 percent. Workers’ comp rates decreased in the mid-single digits range.

Also commenting on insurance rates, Marsh CEO Martin South noted that the firm’s Global Insurance Market Index focuses on the large account segment, and that while rates were down 2 percent overall in the fourth quarter, pricing has gone up 1.5x since 2012.

He commented that it was too early to say what impact the California wildfires would have, adding that it is not seen as a big commercial insurance event.

Wildfire losses could temper cat reinsurance softening

Doyle also added to recent reporting by the firm on the key 1 January reinsurance renewal.

“In reinsurance, underwriting discipline persisted, particularly on program retentions; capacity increased at a more significant pace than client demand,” he said.

In global property cat reinsurance, loss-free accounts saw risk-adjusted rates down 5 to 15 percent, while risk-adjusted rates for loss-impacted accounts were flat to up 30 percent.

The executive added that casualty reinsurance renewals were completed with “varying outcomes”.

“Excess of loss placements continue to face pressure on treaty terms. Quota shares were more stable with sufficient capacity while ceding commissions were flat to slightly down,” he observed.

Guy Carpenter CEO Dean Klisura said the impact of the wildfires on the reinsurance market is uncertain at this time and will depend on the ultimate magnitude of the loss.

“But I would say… at this stage, the risk-adjusted rate reductions that we witnessed at 1 January could certainly be tempered going forward as we go into the 1 April renewal season,” he added.