At the same time, systemic threats are intensifying — from geopolitical instability and climate volatility to cyber fragility, infrastructure vulnerability, and supply chain disruption. The contradiction is striking: this is not a typical softening market, but one marked by mounting stress from systemic volatility.
“Today’s market presents a unique, though perhaps temporary, window of opportunity for insurance buyers,” said Joe Peiser, CEO of Commercial Risk for Aon. “We’re seeing increased capacity, improving terms and competitive pricing across many lines. However, what makes this moment truly distinct is the backdrop: a deeply interconnected risk environment where geopolitical tensions, climate volatility, cyber threats and infrastructure vulnerabilities are all intensifying.
Peiser added: “This is not a typical soft market cycle; it’s a soft market under stress. That means organizations need to think and act strategically — leveraging favorable conditions to strengthen their programs, optimize capital and build resilience for what comes next. At Aon, we’re helping clients move beyond transactional buying toward a total cost of risk mindset, so they can make better long-term decisions and navigate volatility with greater confidence.”
Key insights from the report include:
Today’s soft market may be short-lived
• Despite current softness, U.S. casualty, property and cyber lines are showing ongoing deterioration in underlying loss activity.
• The fairly limited influx of new capital entering the traditional (re)insurance market leaves the sector exposed to rapid shifts in appetite if a major event occurs.
• This is a strategic window for buyers, but one that may close quickly.
Favorable market conditions for strategic buying opportunities
• Most (re)insurance markets in Q2 saw increased capacity, competitive pricing and flexible terms.
• Property pricing continues to improve; most U.S. placements saw double-digit rate reductions; shared and layered programmes experienced the largest decreases.
• Cyber and directors and officers’ (D&O) markets remain soft, rate reductions are in the single-digit to low double-digit range, with some clients securing higher limits or improved terms at no additional cost, creating opportunities for enhanced coverage.
• Global pricing trends: Most regions (APAC, Latin America, Pacific, EMEA) saw average pricing declines of 1 percent to 10 percent; Pacific saw declines of 11 percent to 20 percent on average for Property and D&O. North America, where pricing was flat, was an exception.
Geopolitical and systemic risk surge
• Trade tensions and reciprocal tariffs are impacting supply chains and inflation-linked claims. For example, U.K. homebuilding costs are projected to rise by £10,000 per unit due to tariffs.
• The ongoing Middle East volatility and the Russia-Ukraine war are driving uncertainty in the political risk and aviation markets.
• The UK court ruling on Russia–Ukraine aviation claims has triggered early market activity, with insurers closely monitoring for potential premium increases, stricter terms and broader reserving impacts in the aviation and war risk markets globally.
Climate and infrastructure pressures mount
• A growing frequency of events like the Spain-Portugal power outage underscores critical infrastructure vulnerability.
• The California wildfires illustrate the continued accumulation of secondary peril losses.
• The Atlantic hurricane season has begun amid predictions of above-normal activity, increasing near-term natural catastrophe exposure.
• $100 billion in global insured catastrophe losses were recorded in H1 2025 — the second-highest H1 on record.
Cyber risk grows despite market softness
• The cyber market remains significantly underinsured, even as artificial intelligence-driven threats like deepfakes, impersonation fraud and ransomware escalate.
• Insurers are closely watching for aggregated loss events, even as capacity and competition rise. Clients are using savings to buy additional limits or broaden coverage, but systemic risks loom.
Emergence of alternative risk solutions
• A shift from transactional buying to total cost of risk strategies is evident, using analytics, alternative capital, and advisory services to manage volatility and enhance resilience.
• Rising interest in weather-triggered and supply chain-linked parametric covers, particularly in energy, infrastructure, and agribusiness.
• Facilities like the Aon Client Treaty are gaining traction, especially in the London Market.
Aon Q2 2025 Global Insurance Market Insights report
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