In its latest report, Aon highlighted a period of expanding market capacity and softening prices across several lines, even as global systemic risks continue to mount.
The Q2 2025 Global Insurance Market Insights report describes this as an unusual market phase, where competitive pricing and improved terms are emerging while pressures from geopolitical instability, climate-related events, cyber threats, infrastructure vulnerabilities, and supply chain disruptions persist.
Joe Peiser (pictured above), CEO of Commercial Risk at Aon, said that current conditions provide a temporary opportunity for insurance buyers, with added capacity and better pricing in many areas.
“However, what makes this moment truly distinct is the backdrop: a deeply interconnected risk environment where geopolitical tensions, climate volatility, cyber threats and infrastructure vulnerabilities are all intensifying,” Peiser said.
According to the report, the soft market may be brief. US casualty, property, and cyber lines are experiencing deteriorating loss activity, and new capital entering the traditional re/insurance market remains limited. A major loss event could quickly shift appetite and pricing, making the current window for buyers potentially short-lived.
Most re/insurance markets in Q2 recorded increased capacity, competitive pricing, and more flexible terms. Property placements in the US saw double-digit rate reductions, particularly for shared and layered programs.
Cyber and directors and officers’ markets reported single- to low double-digit rate declines, with some clients obtaining higher limits or improved terms without additional cost. Globally, pricing fell by 1% to 10% in most regions, with the Pacific recording average declines of 11% to 20% for property and D&O. North America was largely flat.
Aon’s previous quarterly market overview indicated that early in the year most regions – Asia, EMEA, Latin America, and the Pacific – saw property and casualty rates decrease between 1% and 10%. In the Pacific, the trend was more pronounced, with reductions averaging 11% to 20% for certain property and D&O programs.
Further detail from Aon’s property market dynamics report showed that the average property rate change in Q1 2025 stood at –8.52%, compared to –5.45% in Q4 2024. Shared and layered accounts experienced even steeper decreases, averaging –12.12%.
Systemic risks continue to affect market dynamics. Trade tensions and reciprocal tariffs are pushing up costs, such as projected £10,000 increases in UK homebuilding expenses per unit. The Russia-Ukraine war and unrest in the Middle East are adding uncertainty to political risk and aviation markets.
A recent UK court ruling on Russia-Ukraine aviation claims is already influencing expectations for potential premium hikes, tighter terms, and increased reserving in aviation and war risk lines.
Climate and infrastructure pressures remain evident. A widespread power outage in Spain and Portugal highlighted infrastructure vulnerability, while California wildfires and an active Atlantic hurricane season are increasing catastrophe exposure. Global insured catastrophe losses reached US$100 billion in the first half of 2025, the second-highest H1 figure on record.
Cyber risk continues to escalate despite softer pricing. The market remains underinsured, even as AI-driven threats, including deepfakes, impersonation fraud, and ransomware, increase. Clients are using savings to expand limits or coverage, but aggregated loss events remain a concern for insurers.
Aon’s chief broking officer previously emphasised that brokers must increasingly differentiate themselves by delivering bespoke, analytics-driven solutions to clients. The combination of softening pricing and heightened systemic threats is shifting the role of brokers away from transactional placement toward long-term risk advisory.
According to Aon, this involves deeper data utilisation, scenario modelling, and aligning risk transfer strategies with broader enterprise resilience planning, a shift that could reshape buyer-broker relationships over the next several renewal cycles.
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