By David Bull

April 17 - (The Insurer) - The Marsh Global Insurance Market Index showed rates declining 3% in the first quarter, despite an elevated risk landscape, Marsh McLennan CEO John Doyle told analysts on the company’s earnings call Thursday.

The executive was speaking after the company reported adjusted earnings per share of $3.06 for the quarter, which was just ahead of analyst consensus of $3.02, as well as underlying – or organic growth – of 4%, which was in line with its own forecasts but a slowdown on Q4 2024 and the prior-year period.

On the call, Doyle said that the 3% decline in the index on a global basis was an acceleration from the 2% decline in Q4 2024. The index is skewed towards large account business.

Rates in the U.S. decreased by 1%; Latin America was down low-single digits; Europe, the UK and Asia were down low to mid-single digits; and Pacific was down high-single digits.

By line of business, global property rates decreased by 6% year over year, with the softening accelerating from a 3% decline in the last quarter.

In contrast, global casualty rates increased 4%, with U.S. casualty up 8%, including 16% increases in umbrella and excess casualty.

Workers’ compensation rates decreased in the mid-single digits range, while global financial and professional liability (Finpro) rates were down 6% and cyber was also down 6%.

Commenting on conditions in the property market, Doyle said the company had expected a softer market.

“I’m not declaring a soft market, just to be clear, but prices softened a bit in the quarter, we expected that. And it is welcome relief for our clients after five years of price (increases),” he said.

“You’ve seen strong underwriting results for both insurers and reinsurers… And given those results, they’re more growth-oriented maybe than they’ve been over the course of the last couple of years,” Doyle continued.

STABLE REINSURANCE MARKET CONDITIONS

In reinsurance, Doyle said market conditions in the first quarter were similar to what was seen at January 1.

“The strong reinsurer profitability, high ROEs and increased capital levels have resulted in ample supply of property cat capacity and rate reductions. It was also a record quarter for cat bond issuance,” he added.

The executive said U.S. property cat reinsurance rates remained competitive for the April 1 renewal date, with loss-free deals pricing down 5% to 15% and loss-hit programs with rate increases of 10% to 20%.

He added that in U.S. casualty reinsurance there continues to be a range of outcomes, depending on loss experience with primary carriers showing limit, rate and underwriting discipline.

Japanese property cat rates at April 1 were in line with those previously reported by The Insurer, with reductions of 10% to 15% on a risk-adjusted basis.

“Early signs for the June 1 Florida cat risk renewals point to similar market conditions seen in January and April, with an anticipated increase in demand ready to be absorbed by more than adequate supply. As always, our focus is on helping clients navigate these dynamic market conditions,” said Doyle.

Guy Carpenter CEO Dean Klisura said reinsurer appetite for writing property cat business continues to increase with reinsurers deploying more capital as well as a “very strong” ILS market.