Australia’s commercial insurance market has softened considerably but the most arresting feature isn’t simply that prices are down - it’s how inconsistently they’re down. Ask two underwriters to look at the same property risk and you can get two very different answers, even when the submission is clean and the story is familiar.
That dispersion is what Alan Brett (pictured), commercial underwriting director at Australasia Underwriting (AUPL), said is now surprising even seasoned market participants.
“Yes, 100%.," said Brett. "We've seen some real shocks in respect to pricing changes over the last couple of years, especially in the property market."
He said during that time the property market softened very quickly.
“It's probably the most dramatic change that I've seen in my 25-year career,” said Brett.
He was discussing the state of the insurance market with IB on the floor of UAC’s Sydney Market Exchange this week. He described a market that, in parts, appears to have sprinted from scarcity to surplus. The catalyst was the sudden increase in supply: new and returning capital, new entrants and incumbents chasing growth - all competing to deploy capacity quickly.
That Australian story is echoed in global broker data. Marsh’s Global Insurance Market Index has recorded multiple consecutive quarters of average commercial rate declines, citing significant available capacity and competition, alongside more favourable reinsurance pricing. Aon’s market commentary likewise points to ample-to-abundant capacity and increasingly meaningful reductions on preferred property risks.
In practice, that abundance can show up as “surprising pricing differences” because insurers and MGAs are not all pursuing the same objective at the same moment. Some are defending margin after a punishing run of catastrophe and inflation volatility; others are chasing top-line, seeding portfolios, or trying to hold broker business before the next turn. Even within the same carrier group, appetite can diverge by sub-class, construction type, occupancy, protection, or simply how nat cat-exposed the model says the asset is this week.
Brett said that the softness is being amplified by speed. Where previous cycles took longer to wash through the portfolio, he said this one is being compressed by how quickly capacity has arrived and been put to work.
“The property market softened very quickly,” said Brett. “It's probably the most dramatic change that I've seen in my 25-year career.”
That rush is visible higher up the chain as well. Reinsurance renewals at January 1, 2026, delivered broad price reductions in property catastrophe, with multiple market indices pointing to mid-teens declines and a clear supply-demand imbalance. Lower reinsurance costs don’t automatically translate into cheaper primary insurance line-by-line, but they do change the psychology: when the cost of protection falls, more players feel able to compete and compete harder.
It also helps explain why property can feel like two markets at once. Good risks - well-protected, well-maintained, with strong data and manageable nat cat exposure - are where over-subscription and aggressive competition are most likely to break out. Other risks, particularly those with meaningful catastrophe exposure or poor loss experience, may see far less relief, because technical pricing constraints still bite even in a soft cycle.
For brokers, particularly in the property market, the consequence can be opportunity mixed with complexity. This is still a time to look closely at renegotiating terms, broaden wordings and revisit deductibles but it’s also when the cheapest quote may be coming from capacity that is new, highly growth-driven, or potentially more “flighty” when the cycle turns. That’s why underwriters on the floor of UAC’s Sydney Market Exchange were urging brokers to look beyond the premium and scrutinise who is backing the limit and why.
If the market’s present softness is being driven by speed and capacity, Brett argued that the shape of the cycle is being influenced by what came before it.
“I think what's probably unique about this cycle is the fact that the hard market lasted for so long,” he said.
So a multi-year hard market pushed rates higher for longer than many buyers had been accustomed to, so the “correction” now feels sharper as pricing falls back toward earlier baselines.
That context could matter when trying to forecast how long the soft phase lasts. Reinsurance pricing is one clue: if the reinsurance market stays well-capitalised and competitive, it tends to support a longer runway for primary market competition. Recent reporting has pointed to growing pools of reinsurance capital and continued alternative capital participation. But there are natural brakes.
Brett’s view is that the pace of the fall is itself the limiter - because price can only compress so far before minimum rates, portfolio realities and claims inflation force discipline back into the system.
“I think the speed of the cycle change means that it can't really continue,” he said.
He expected the market to find a floor relatively quickly, likely within the year. This could be because the market has already moved so far, so fast and because there is always a point where the technical minimum for a given risk reasserts itself.
So how long will it stay soft? The best answer could be that property will stay competitive for preferred risks while capacity remains abundant but the softness will increasingly fragment depending on nat cat exposure, loss performance, data quality and whether today’s capacity proves patient or temporary when the next shock arrives.
