Global Commercial Insurance Pricing Trends: Insights from Marsh Risk
The latest findings from Marsh Risk's Global Insurance Market Index reveal a notable shift in global commercial insurance pricing, with rates dropping by 4% in the fourth quarter of 2025. This marks the sixth consecutive quarterly decline after years of rate increases, indicating significant changes in market dynamics driven by factors like intensified insurer competition, positive loss trends, and favorable reinsurance pricing.
Regional Variations in Insurance Pricing
Regional differences have emerged, with the Pacific region seeing the largest rate reductions at 12%. Other areas, including India, the Middle East, and Africa, saw a 10% decline. Meanwhile, Latin America, the Caribbean, the UK, and Canada each experienced a 7% reduction, while Europe and Asia had rates decrease by 5% and 6%, respectively.
U.S. Market Trends and Challenges
In contrast, the U.S. market saw relatively stable commercial insurance rates in the fourth quarter, following a 1% decline earlier. Significant variations exist across different U.S. insurance lines, with property insurance rates seeing an 8% decrease, an improvement from a previous 9% reduction, partly due to fewer catastrophe-driven placements. Some insurers adjusted to competitive pressures through enhanced policy terms instead of aggressive rate cuts.
Conversely, U.S. casualty insurance rates increased by 9%, building on an 8% rise from the prior quarter. Excluding workers' compensation, the casualty segment recorded a 12% increase, driven by pressure from large jury awards, rising vehicle repair costs, and higher insurer coverage thresholds. Workers' compensation struggles with growing reserve and medical cost pressures, affecting the auto liability coverage landscape.
Liability and Specialty Insurance Dynamics
General liability rates showed modest increases, particularly within the real estate, hospitality, and public entity sectors. Insurers are increasingly adding exclusions for specific risks like per- and polyfluoroalkyl substances, biometric data, and cyber risks. The U.S. umbrella and excess liability market saw substantial rate hikes, with risk-adjusted rates rising by 19%, influenced by limited coverage options for challenging risks like PFAS.
Financial Lines and Cyber Insurance Developments
In financial and professional lines, rates remained stable. Directors and officers liability increased by 1%, while financial institutions' rates decreased by 2%. Errors and omissions coverage stayed unchanged. A positive development for buyers in cyber insurance demonstrated a 3% rate reduction, thanks to stable claims frequency and improved outcomes for ransomware incidents, which declined due to enhanced cybersecurity measures.
John Donnelly, President of Global Placement at Marsh Risk, notes these trends as opportunities for risk managers. "Clients can secure reduced premium rates and negotiate broader terms," he emphasized, highlighting the importance of enhancing program resilience to handle growing risk complexities. For a comprehensive understanding and updates on industry trends, access the full report from Marsh Risk.