Marsh Analysis: Chilean insurance prices decline for second consecutive quarter

This is an automated translation of the original release published in Spanish.

PRESS RELEASE from Marsh
December 2024

Santiago, December 2024.- Marsh, the number one insurance broker and risk advisor globally and locally, published the Global Insurance Market Index for the third quarter of 2024, an indicator that measures the evolution of global commercial insurance premium prices and provides information on the main insurance markets in the world.

The composite insurance indicator in Chile registered a 2% decrease for the second consecutive quarter , while in Latin America there was an increase of 3%. According to Marsh, this is due to the fact that important countries within the region are experiencing increases in their prices due to different internal factors in each market, causing the final result of the entire region -unlike that of Chile- to be found with rising prices.

Joaquín Palomer, Placement Manager at Marsh Chile , points out that “despite what is happening in other countries, the reality in Chile is totally different, as we have been declining for two quarters, accumulating a fall of 4%. This is due to the normalization of prices that currently exist in the country, after the rise in geopolitical risks that occurred after the social outbreak, and also after the pandemic. The markets, for now, are softening.”

For the executive, it is important to note that the market remains rigorous in its analysis for risk underwriting. Those clients who have assets with deficient fire protection, or inadequate or incomplete security policies, will continue to face capacity shortages and a greater challenge in pricing.

The global composite insurance price level , which had been rising since Q4 2017 and managed to flatten out in the previous half, declined for the first time in seven years, as markets have shown signs of deploying capacity in high-consumption catastrophe accounts in recent months.

“Interest rates are on the decline, allowing for greater willingness to insure across industries, with greater availability in the global market, coupled with the decline in catastrophic claims, which has remained relatively stable throughout 2024, pending the final analysis of losses from past hurricanes Helene and Milton,” says Palomer.

On the other hand, property insurance prices in Chile fell by 1.96%, while in Latin America they have increased by around 3%, driven largely by Brazil and Colombia. Worldwide, prices also fell by 2%.

In the quarterly variation by local area, the education sector (-7.8%), industrial (-4.8%), real estate (-4%) and agriculture (-0.8%) showed decreases in Q3. However, the retail (0.1%), entertainment and tourism (1.2%) and services (2.4%) industries showed increases in the July-September period.

According to Palomer, this trend, together with changes and new capacity policies, “show that we are experiencing better pricing during 2024, which is already being seen for several accounts that maintain a good claims rate and adequate protection policies, with downward renewals and more investment interest.”

The report also shows that liability rates rose 6% globally , remaining relatively consistent regionally compared to the previous quarter, except for the US, where they rose significantly (10%) driven largely by excess/umbrella rates.

Finally, financial and professional lines prices decreased by 7% globally , with declines in all regions. Cyber insurance decreased by 6% , with declines observed in all regions, as was the case in the previous quarter.