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A rapidly softening insurance market is at the top of the holiday wish list this year for many in the world of real estate. This year has been an eventful ride, with Q3 2023 closing out as the 24th consecutive quarter of price increases for commercial property coverage. This hard property market impacts various parties, from businesses and investors to underwriters and brokers.

However, there is a chance for positive shifts for less catastrophe-prone and lighter occupancy risks as the new year comes around. Q3 of 2023 was the 11th quarter in a row where increases in the global insurance market eased. The trend this past quarter showed rates increasing on an average of 3%, down from 18% in Q1 2021, according to Marsh McLennan Agency's (MMA) Business Insurance Trends report. Rate increases over the last six years have been no secret, but seeing the level of those increases lessen over the past two years should provide hope. Additional good news is that builder's risk—the cost to get a project off the ground—has consistently softened in the last year to 18 months.

While it was a very active 2023 hurricane season—the fourth highest on record since 1950—there was a noticeable decrease in domestic property damage compared to years past. With 2023 being a potentially profitable year for some carriers, Marsh McLennan Agency anticipates that the January 1, 2024 reinsurance renewal rate increases will be much lower than last year's record-setting increases.