Global property and casualty insurance rates increased by lessthan one percent for major lines during the third quarter thisyear, indicating that prices may be stabilizing, says a report frominsurance broker Marsh.

The four-page report, released today, says the cost of insurancefor major lines increased 0.9 percent during the third quartercompared to 2012's second quarter.

Marsh says in its Global Insurance Market Quarterly Briefing thatits index is a composite of changes in insurance in 20 marketsglobally over a 12-month rolling period.

The report says that renewal rates rose 1.4 percent in thequarter, the same rate of increase as the second quarter.

Andrew Chester, chief executive officer of Bowring Marsh, says,“With capacity and appetite for well-managed risk still strong,insureds are still able to achieve favorable results on renewal inmany lines of business.”

Among some of the report's highlights:

• Financial and professional insurance rates rose 1.9 percent inthe third quarter, in contrast to almost flat renewals for thesecond quarter.
• A benign natural catastrophe season kept increases to anaverage of 1.2 percent on property-insurance renewals for the thirdquarter. Insureds with a clean history “were more likely toexperience flat renewals.” While the majority of U.S. commercialaccounts experienced rate increases on their property-insurancerenewals, the lack of hurricane activity “restricted” insurers'efforts to obtain additional increases.
• Casualty-insurance rates rose 1.2 percent on renewal for theperiod, higher than 0.8 percent in the second quarter. The reportnotes that “underwriters continue to show caution around particularrisks,” such as fracking and cyber liabilities.

The report says U.S. companies were more likely to experiencerate increases than decreases in major lines of insurance for thesecond quarter in a row.

Turning to excess-casualty lines, Marsh says more clients sawrate increases in this line compared to the previous quarter.

The report says that there are capacity issues concerning theglobal-energy market as companies are closely managing theirexposures in that line of business after substantial losses overthe past several years.

“Insurers are struggling to provide sufficient insurancecapacity for the growing number of mega-energy projects—those withcapital expenditure of more than $5 billion,” says the report.These clients are also willing to self-insure if they cannot findacceptable terms among insurers.

However, midsize energy projects, valued between $500 millionand $5 billion, are enjoying the benefits of “fierce levels ofcompetition among insurers.”

Directors and officers insurance coverage in the United Statesexperienced increases of as high as 10 percent, the report says.While the number of securities lawsuits remained stable, increasesin legal fees put pressure on insurers.

“Much of this increase can be attributed to larger and morecomplex cases coupled with higher legal billing rates,” says thereport. “As a result, in the U.S. market, primary rates aretrending upwards.”