Your guide to the insurance market and how it affects your business.
Softening insurance market
In heartening news for clients, the increasingly favourable business insurance market conditions that emerged in 2023 remained in play throughout 2024 and have continued apace into 2025. This is being evidenced within pricing and terms for key commercial insurance lines.
The continued softening of rates across property and financial lines were a welcome reprieve for many clients after several years of significant premium rises and challenging conditions.
The majority of placements, particularly non-complex and mid-market risks, continued to see a softening of terms and conditions. However, some specific risks and locations, namely loss-affected and Natural Catastrophe (NatCat)-exposed risks, remained challenged.
Competition among insurers remained high as carriers continued to pursue growth among their portfolios. This competition resulted in greater capacity for clients with quality risks and better pricing for hard-to-place risks. Stable pricing in most insurance classes was also evident due to the increased capacity across the market.
Consequently, there was renewed confidence among insurance buyers in both coverage and pricing. Broader coverage options provided clients with greater choice and control over risk placement. It also enabled clients to build insurance programs to suit their risk, including how their program was structured. There has been increased interest in alternative risk management solutions such as parametric insurance and captives.
However, the improving market conditions were set against a background of volatile micro- and macro-economic conditions and wider global pressures including:
- inflation (core and social)
- interest rate movements
- capital market volatility
- economic growth (slowing locally and internationally)
- supply chain disruptions
- labour shortages, including specialist skills in some areas
- extreme weather events (global NatCat insured losses in 2024 exceeded US$140 billion)
- reinsurance costs (in particular for property)
- challenging claims environment
- increasing frequency and severity of cyberattacks
- emerging risks from the rapid adoption of artificial intelligence (AI)
- ESG concerns including issues around ‘washing’, activism and litigation
- tightening regulatory landscape
- geopolitical issues (including trade issues such as tariffs), and
- global conflicts (including the war in Ukraine and Israel–Hamas war).
While these factors are expected to continue to influence the insurance market throughout the remainder of 2025, notwithstanding any major upset, there is cause for
confidence that conditions will continue to improve for many clients with further rate reductions and increased coverage options.
Download the latest EBM Market Summary here.
