Global Insurance Rates Continue to Fall as Market Softens

Global commercial insurance rates dropped by 4% in the third quarter of 2025, marking the fifth consecutive quarterly decline after seven years of steady increases, according to the Global Insurance Market Index released by Marsh, a leading insurance broker and risk advisor.

The downturn was primarily driven by abundant market capacity, intense competition among insurers, and favourable reinsurance pricing conditions, the report stated.

All global regions experienced a reduction in composite insurance rates during the third quarter. The Pacific region saw the steepest decline, while the United States recorded the smallest decrease.

The third quarter’s declines followed several years of rising rates, signalling a broad-based softening across both regions and product categories.

Global property insurance rates fell by 8%, with the Pacific region again leading with a sharp 14% decline.

• The United States and Latin America & Caribbean each recorded 9% decreases.
• Other regions posted reductions between 3% and 7%.

Rates for financial and professional lines dropped 5% globally, with decreases seen in every region. Marsh noted that reductions in this category have averaged mid-single digits in 12 of the past 13 quarters.

Cyber insurance rates decreased by 6% globally, continuing a downward trend across all regions.

• Europe led the decline with a 12% fall.
• Latin America & the Caribbean and the United Kingdom followed closely, each dropping 11%.

The sole product line showing growth was casualty insurance, which rose 3% globally, down from 4% in the previous quarter.

• In the United States, casualty rates increased 8%, driven by the frequency and severity of claims, many involving large jury awards.
• Outside the US, casualty rates rose 1% in Europe but declined up to 7% in other regions, reflecting differences in legal environments and lower litigation risks.

John Donnelly, President of Global Placement at Marsh, remarked:

“With the exception of US casualty, clients are benefiting not only from lower rates but also from opportunities to negotiate improved terms and broader coverage. These rate trends remain consistent in a market characterised by ample capacity.”

The report highlighted that the North Atlantic hurricane season (1 June–30 November) had produced few notable storms in 2025, contributing to the stable risk environment.

Marsh also noted that many clients—particularly those with strong risk profiles—are leveraging the competitive conditions to:

• Negotiate enhanced terms
• Broaden coverage
• Pursue alternative risk transfer strategies, such as self-insurance and captive programmes

As the global insurance market continues to stabilise, the report suggests that insurers and clients alike are entering a phase defined by capacity abundance, moderated pricing, and strategic risk management innovation.