Global insurance markets ended 2025 on favourable terms for buyers, but conditions are becoming increasingly varied across product lines and regions, according to Aon's Q4 2025 Global Insurance Market Insights.
According to the report, casualty lines are facing particular pressure from surging litigation costs.
The report noted that reduced pricing, expanded limits and broader terms characterized key lines including property, cyber and directors and officers (D&O) liability throughout 2025. However, the global market is entering 2026 with conditions that differ depending on the line of business and geography.
Property insurance conditions remained soft during the quarter, supported by underwriting results and reduced major loss activity.
Data from WTW revealed that US commercial insurance rates increased 3.8% in the second quarter of 2025, down from 5.9% in the same period a year earlier – continuing a downward trajectory from prior quarters.
Casualty lines faced significant headwinds during the period. Nuclear verdicts and litigation funding contributed to higher loss costs for US-exposed risks, while capacity constraints affected umbrella and excess liability coverage.
The severity of nuclear verdicts has doubled since 2020, according to industry data. The median nuclear verdict rose to US$44 million in 2023 from US$21 million in 2020, while the Swiss Re Institute reported that US liability claims climbed 57% over the past decade.
Third-party litigation funding – largely unheard of prior to 2010 – is forecast to become a US$30 billion-plus industry in the US in the coming years, according to research from MarshBerry.
Joe Peiser (pictured above), CEO of commercial risk for Aon, said the findings underscore shifting dynamics in the market. "Market conditions continue to vary across products and geographies, reinforcing that a single, market-wide narrative no longer captures the full picture," Peiser said.
Mona Barnes, chief claims officer for commercial risk at Aon, pointed to claims performance as a growing consideration.
"As expectations rise, Aon is helping clients assess performance, understand differences across the market and make decisions that strengthen program resilience," Barnes said.
According to the report, organizations face a limited window to secure favourable terms before macro-level pressures contribute to more varied conditions later in 2026.
