Global Commercial Insurance Prices Decrease 4% in Q3 Due to Market Competition and Reinsurance

A Softening Global Market: What the 4 % Drop in Q3 Commercial Insurance Rates Means

For those of us embedded in the commercial insurance world, the most recent figures from the Marsh Global Insurance Market Index catch the eye. They show a 4 % decline in global commercial insurance rates during the third quarter of 2025, a clear sign that we may be entering a softer phase of the market. (TMCnet)

Unpacking the Drivers

Several forces are at play beneath the surface of that headline figure:

Firstly, insurer competition is ramping up. Marsh points out that global insurers are actively seeking to deploy capacity and grow portfolios—this is pushing them toward more aggressive pricing. (Marsh)

Secondly, reinsurance pricing remains favourable, which in turn gives primary insurers more flexibility. For example, J.P. Morgan expects further reinsurance rate drops at the 1 January 2026 renewals, reinforcing the softness. (ReinsuranceNe.ws)

Thirdly, capacity is abundant in many markets. With plenty of capital available and fewer immediate underwriting shocks, insurers are under less pressure to push premium rates upward—at least for now.

Regional and Product Line Nuances

While 4 % is the global average, the detail is more nuanced when you dig into regions and product lines:

Product lines:

• Property insurance rates fell around 8 % globally in Q3. (TMCnet)

• Cyber saw declines of about 6 % globally, with double-digit drops in Europe and the UK. (Insurance Insider)

• Casualty insurance showed a contrasting trend: globally up ~3 %, led by rises in U.S. casualty. (TMCnet)

Regions:

• The Pacific region recorded some of the largest rate decreases, for example an 11 % drop in Q3 in one dataset. (TMCnet)

• UK’s composite rate fell ~6 %. (TMCnet)

• The U.S. composite rate declined by only ~1 %, pointing to more constrained softness in North America. (TMCnet)

Why It Matters for the Insurance Industry

“With the exception of U.S. casualty, clients are benefiting not only from lower rates but also from opportunities to negotiate improved terms and broader coverage.”
— John Donnelly, President, Global Placement at Marsh (ReinsuranceNe.ws)

This drop in rates has several implications for insurers, brokers, risk managers and industry observers:

• Margin pressure for insurers. Price reductions mean underwriting profitability must come either from tighter selection, better claims performance, or cost efficiencies.

• Brokers and buyers gain negotiating power. With more capacity chasing business, the leverage shifts somewhat toward the buyer.

• Watch for the cycle turning. The insurance market cycle is alive and real. Soft markets don’t last indefinitely. One large catastrophe or a sudden capital shock can tighten conditions rapidly. (Wikipedia)

• Product segmentation matters. While many lines are seeing rate softening, casualty remains problematic—driven by litigation costs, nuclear verdicts, and social inflation.

• Coverage and terms may become the battleground. As price competition heats up, insurers often rely on non-price tools (e.g., tighter terms, increased deductibles, stricter exclusions) to protect profitability.

Quick Snapshot: Trends at a Glance

• Global composite commercial rates: –4 % in Q3 2025.

• Property lines: ~–8 %.

• Cyber: ~–6 %.

• Casualty: +3 % globally (with U.S. larger).

• Major regions: Pacific (largest drop), UK, Europe, Canada all experiencing declines; U.S. softer drop.

What Should Industry Stakeholders Do Now?

Given the current environment, here are a few practical strategic considerations:

• Review renewal strategies: With price relief available, buyers should ensure they aren’t just chasing lower cost but also assessing coverage breadth and terms.

• Monitor exposures carefully: Especially casualty lines—while others soften, this segment may turn into a “hard” pocket even in a generally soft market.

• Capital management remains critical: Insurers should manage underwriting discipline even as competition intensifies.

• Stay alert for signals of shift: A large catastrophe, inflation surprise or reinsurance shock could reverse the trend quickly.

• Educate clients/buyers: Brokers and risk professionals should guide clients to balance “cheaper” with “appropriate” rather than simply chasing lowest premium.

Final Word

The current softening in global commercial insurance pricing offers a distinctly buyer-friendly moment. However, for insurers and brokers, it is a time to remain vigilant and disciplined. As one veteran underwriter put it, “Cheap today can become unaffordable tomorrow if the cycle turns.” In this industry, timing and resilience count as much as pricing.