Global insurance rates continue to decline as competition among insurers grows, says Marsh

Global commercial insurance pricing dropped by an average of 4% in the second quarter of 2025, according to the latest Global Insurance Market Index from Marsh, an insurance broker and risk advisor and a business of Marsh McLennan.

This marks the fourth consecutive quarter of average rate reductions and reflects an ongoing softening of the market that began in early 2021, following a prolonged period of rate increases that lasted seven years.

Marsh attributes the continuing decline in global insurance rates primarily to heightened competition among insurers.

This competitive environment, driven by both incumbent players and new market entrants seeking to expand their portfolios, has led to an increase in available capacity, more favourable pricing, and improved policy terms for clients.

Marsh notes that these conditions are giving organisations greater flexibility to negotiate and secure broader coverage than has been available in recent years.

According to Marsh’s data, nearly all major regions experienced composite rate decreases in the second quarter of 2025. The Pacific region recorded the most substantial decline, with average rates falling by 11%, while the UK followed with a 6% decrease.

Asia, Latin America and the Caribbean, and the India, Middle East and Africa (IMEA) region each saw rates fall by around 5%, with Canada and Europe both registering 4% reductions. The United States was the only major region where average rates remained flat during the period.

Marsh reports that global property insurance rates declined by 7%, following a 6% drop in the first quarter. The most significant reductions were seen in the Pacific, where rates fell by 13%, and the United States, which recorded a 9% decrease. Other regions experienced reductions ranging between 4% and 7%. In contrast, casualty insurance saw a 4% global increase, led by a 9% rise in the United States.

According to Marsh, this uptick is largely attributable to the growing frequency and severity of claims, particularly those involving high jury awards. In other regions, casualty pricing trends ranged from modest increases to slight decreases.

Financial and professional lines continued to show signs of stabilisation, with a 4% average decline globally. This trend was evident across all regions except the United States, where rates remained steady. Cyber insurance pricing dropped by an average of 7%, with every region showing a decrease. Marsh highlights particularly notable reductions of 17% in Latin America and the Caribbean and 15% in Europe.

Marsh also observed that many clients are responding to the softening market by reassessing their risk financing strategies. With competitive pricing and expanded options, more organisations are taking advantage of alternatives such as self-insurance, captives, and parametric solutions. Marsh notes a continued increase in the formation of new captive insurance vehicles, as well as greater optimisation of existing ones.

Commenting on the findings, John Donnelly, President of Global Placement at Marsh, said: “Mounting competition among insurers with ambitious growth targets is providing reduced pricing and broader coverage options. Against this backdrop, rising US casualty rates are a concern for clients.

“As geopolitical issues, including tariffs and cross-border conflicts, create new challenges and uncertainties, organisations now have access to many attractive traditional and alternative financing strategies to manage their risks. Clients should work closely with Marsh to assess exposures and risk appetite and to find areas where it may be possible to broaden coverage compared to what was available in recent years.”

While the current rate environment is favourable for many buyers, Marsh cautions that unforeseen events, such as large-scale natural catastrophes, could influence pricing trends in the future.

Nevertheless, if current market conditions persist, Marsh expects the overall trajectory of declining rates and expanded insurer competition to continue through the remainder of 2025.

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