Global Commercial Insurance Rates Decline: An Analysis

Global Commercial Insurance Rates Decline: An Analysis

In the fourth quarter of 2025, global commercial insurance premiums experienced a notable reduction of about 4% on average, as reported by Marsh Risk's Global Insurance Market Index. This marks the sixth consecutive quarter of declining rates, following a period of increases that began in 2018 and reshaped the insurance industry's landscape.

The persistent hard market was driven by several factors, including sustained economic and social inflation, rising natural disaster costs, and limited reinsurance availability, notably after Hurricane Ian in 2022. However, recent trends such as increased interest rates, fewer major loss events, and expanded market capacity have eased underwriting pressures, leading to the current rate reduction.

Regional Rate Adjustments

All global regions, except the United States, saw year-over-year composite rate declines in Q4 2025. The Pacific region led with a 12% drop, followed by a 10% decrease in India, the Middle East, and Africa. Latin America and the Caribbean, the United Kingdom, and Canada each recorded a 7% reduction. In contrast, the US market remained stable, with rates flat in Q4 after a 1% decline in the previous quarter.

Sector-Specific Trends

In the property insurance sector, global rates fell by 9%, outperforming the previous quarter's 8% decline. The Pacific region reported a substantial 14% decrease, while Latin America, the Caribbean, India, the Middle East, Africa, and the UK also noted double-digit reductions. Conversely, global casualty rates rose by 4%, primarily influenced by a 9% increase in the US, driven by insurer concerns over claim severity and frequency, including large jury awards.

Financial and professional lines insurance rates decreased globally by 4%, with India, the Middle East, and Africa seeing the biggest drop at 11%. Cyber insurance rates observed a 7% global reduction, with declines across all regions.

Market Insights and Predictions

John Donnelly, president of Global Placement at Marsh Risk, highlights that "ample capacity across most lines and regions" has enabled clients to negotiate lower premiums and broader terms. He emphasized the current market conditions as opportunities for clients to enhance their coverage.

The WTW Insurance Marketplace Realities 2026 report indicates that nearly all commercial lines, excluding excess casualty, now display soft-market traits. This scenario presents buyers with opportunities to expand coverage and bolster structural positions. However, Aon's Q4 2025 Global Insurance Market Insights warns that these favorable market conditions may be temporary, with potential shifts expected due to macroeconomic pressures later in 2026.

Strategies for Optimal Coverage

Industry experts recommend clients begin renewal planning 60 to 90 days early. In sectors like cyber and financial insurance, proactive marketing and detailed submissions can position buyers as preferred risks and attract competitive interest from insurers.