LONDON (Reuters) – Global insurance premiums fell 0.9% last year as the market became more competitive after years of rate rises, insurance broker Howden said in a report on Thursday.
Insurers have consistently raised rates in recent years in response to losses from wars and natural catastrophes, and due to inflationary pressures.
This has made them profitable, which has encouraged additional players into the market, pushing down prices.
Reinsurance rates also fell on Jan. 1, the industry’s preferred policy renewal date, with global property catastrophe reinsurance rates down by 8%, Howden said.
Reinsurers insure the insurers, and January reinsurance renewals typically set the trend for the following year’s insurance rates.
“Our clients are beginning to see relief from the pricing pressures of the last three years,” said Tim Ronda, chief executive of Howden Re, Howden’s reinsurance business.
Global property catastrophe reinsurance rates fell 5% to 15%on Jan. 1 for insurers’ client portfolios that have not suffered losses, reinsurance broker Guy Carpenter, a unit of Marsh McLennan (NYSE:MMC), said this week.
However, Howden said this year could be volatile for insurers as they absorb most of the losses from natural catastrophes, such as hurricanes and wildfires themselves, with reinsurers continuing to limit the amount of cover they provide.
