Commercial insurance market increasingly favourable to buyers: Willis

Following years of volatility, the commercial insurance market is entering a period of relative stability, with favourable conditions for buyers driven by abundant capital, advancing technology, and data-driven risk strategies, according to a recent report by Willis, a WTW business.

The sector’s turbulence stemmed from the pandemic, inflationary pressures, and geopolitical unrest. However, Willis noted that insurers are now pursuing growth across multiple product lines, supported by industry surplus capital exceeding $1 trillion and reinsurance capacity of more than $725 billion.

This capital strength is fostering a market environment increasingly favourable to buyers.

The report highlighted that property insurance is entering a soft market, with renewal rates declining 8% in Q2 2025 following a 5.5% drop in Q1. Workers’ Compensation also remains favourable, bolstered by a $16 billion reserve surplus.

Ample capacity—excluding excess casualty—and advances in technology are enabling organisations to secure broader coverage and optimise program structures more effectively than in recent years.

“Buyers are navigating a very different market than just a few years ago,” said Jon Drummond, Global Head of Carrier Management at Willis. “We’re seeing meaningful opportunities for companies to enhance their programs and drive better returns on their insurance spend, even as certain lines remain under pressure.”

Willis identified artificial intelligence (AI) as a defining force in this period of transformation, reshaping underwriting, claims management, and product design. AI-powered tools are delivering deeper risk insights, enabling faster, more informed decisions, and supporting the creation of products tailored to emerging needs.

However, the report cautioned that systemic cyber events, financial market shocks, or escalating climate-related disasters could quickly reverse current gains and reintroduce volatility to the commercial insurance market.

Willis emphasised that now is the time for strategic action. Buyers who embrace data-driven decision-making, leverage emerging technologies, and partner with trusted advisors will be best positioned to capitalise on favourable conditions while preparing for future risks.