Global Insurance Premiums Decline

LONDON (Reuters) – Global insurance premiums fell by 0.9% last year, as reported by insurance broker Howden on Thursday.

Insurers have steadily increased rates in recent years due to losses from wars, natural disasters, and inflationary pressures. This trend has led to increased profitability, enticing more players into the market and subsequently decreasing prices.

On January 1, a typical policy renewal date, global property catastrophe reinsurance rates also dropped by 8%, according to Howden. Reinsurers, which provide coverage to insurance companies, saw a decline in their rates, suggesting a trend for the coming year.

Tim Ronda, CEO of Howden Re, noted, “Our clients are beginning to see relief from the pricing pressures of the last three years.”

Furthermore, global property catastrophe reinsurance rates fell by 5% to 15% for insurers’ portfolios that haven’t encountered losses, as reported by reinsurance broker Guy Carpenter, a division of Marsh McLennan (NYSE: MMC).

Despite this positive shift, Howden cautioned that the year may bring volatility for insurers as they face the brunt of losses from natural disasters like hurricanes and wildfires, while reinsurers continue to restrict the coverage they offer.