Calling the bottom of an insurance cycle is tricky. By the time everyone agrees rates have stopped falling, the best buyers have usually already banked their reductions and the market is busy splitting into “preferred” and “problem” risks rather than moving in a straight line.
“I think, statistically, the potential is there that the cycle has bottomed and we’ll slip back into a more rational way of pricing,” said Steadfast Group CEO Robert Kelly (pictured left) in response to an IB question during the firm's recent results presentation. With a focus on the broker SME market, Kelly runs a business that sits close to the insurance renewal coalface.
In a different sector, another CEO said the softening signs of months past are no longer evident. Lockton's focus is the middle market and upper specialty. “We’re not seeing any signs of softening,” said Marcus Pearson (pictured right), CEO of Lockton Pacific. “If you look at the share price performance of the really large global listed brokers over the past several months, you can see the analysts aren’t believing it either, because they’re seeing depressed earnings going forward.”
Kelly’s answer is a portfolio-level signal that rate movement has slowed, flattened and started to edge back up - a pattern consistent with a soft market losing momentum.
He told investors the group “chart[s] carefully” rate changes across product lines and that while several lines were “in the red over the first half” (he listed classes including construction, cyber, travel, aviation and others), those were “a very small percentage” of the overall mix.
On the “other side of the chart”, he said many classes were positive “period to period” and “went up”.
The more telling part was the timing. Kelly described Steadfast’s overall rate movement stepping down from “plus 3.7% in June of 25”, falling to around 2% by September/October and then lifting again - “2.4” in December and “2.7” in January.
That sequence underpins his conclusion that the market has “potentially” bottomed and is returning to “what is realistic”, which he defined as inflation-covering increases. That could be something like 3% to 4% annualised movement that keeps pace with inflation and supports insurer margins. So this is likely not the start of steep increases.
The big global broker indices still describe a buyer-friendly environment overall - but with more unevenness by product, geography and risk quality. Aon’s Q4 2025 Global Insurance Market Insights similarly said “soft market conditions, ample capacity and heightened competition continued across most geographies and lines”, while also pointing to pockets where underwriting discipline is sharpening (cyber is a common example, where pricing can still be down while insurers push for better risk information and sustainable terms).
The more “floor-like” signals, however, may be coming from reinsurance - not because reinsurance has turned hard, but because it frames how far prices have fallen versus prior lows. S&P Global’s coverage of the January 1 2026 renewals said buyers achieved reductions again, with “double-digit” declines, yet pricing remained “well above previous lows” and “50% higher than the 2018 low”, citing Gallagher Re.
Put together, that triangulates a market that is easing - but from a level still structurally above the last true trough. In other words: it can feel like “the bottom” to buyers who have enjoyed multiple rounds of cuts, even if the long-cycle floor is lower than today’s pricing.
For Australia and New Zealand brokers heading into 2026 renewals, many clients will still see opportunities to improve terms and pricing, particularly in well-performing, well-differentiated risks. But if Kelly is right, the easiest phase of the soft market may be close to done - replaced by a flatter, more selective market where differentiation, data and claims performance decide who still gets the last of the reductions.
