US Commercial Lines Rates Up 3% in Q4 2023

Broker Marsh said the composite rate change at renewal for U.S. commercial lines was up 3% in the fourth quarter 2023, led by an 11% increase in property rates.

The Marsh Global Insurance Market Index said it was the 25th straight quarter in which U.S. commercial property insurance rate increased — matching the mark for consecutive quarterly global commercial insurance rate increases (up 2%).

The 11% increase in Q4 U.S. property rate increases matched Q4 2022 but was below increases of 17%, 19%, and 14% seen in the previous three quarters of 2023. Marsh said clients retained more risk by increasing deductibles or using captives, parametric, or structured solutions as underwriters scrutinized catastrophe deductibles and limited coverage for non-physical damage, cyber and communicable disease.

“Risks with limited natural catastrophe exposure and stable incumbent capacity typically experienced better results than did risks with losses and/or concentrations of assets in CAT zones, including the Gulf of Mexico, the Atlantic coast, and California,” Marsh reported.

Rates were down for the sixth consecutive quarter (-6%) in U.S. financial and professional lines as directors and officers liability insurance for public companies declined 8%. Rates for financial institutions decreased 5%, and for cyber, rates were down 4% though ransomware attacks increased in frequency and severity. Regarding U.S. cyber insurance, “Capacity was available, especially for excess programs,” Marsh reported.

U.S. casualty markets remained competitive, especially in workers’ compensation, as rates increased 3% in Q4, compared to 2% the quarter before and 1% in Q4 2022.

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