Softening pricing trend spreads to more markets in Q1: Aon

Risk managers enjoyed a “growing softening trend” in the first quarter, as lower rates spread across wide “swathes” of the market, creating a “largely buyer-friendly” environment, according to Aon PLC.

While market conditions remained moderate at the start of the year, Aon says in its “Q1 Global Insurance Market Insights” report that softer pricing accelerated for some risks.

Pricing continued to be flat for North American buyers, but the Europe, Middle East and Africa region saw pricing move from flat in the fourth quarter of 2024 to down by 1% to 10% in the first three months of this year, matching the trend in Asia and the Pacific regions. Pricing for Latin American buyers, however, moved in the opposite direction, from down by 1% to 10% in the final quarter of 2024 to flat in Q1.

Joe Peiser, CEO for Commercial Risk Solutions at Aon, said the insurance market “has been a welcome source of stability” amid turbulence in the geopolitical climate, as he warns that “trade disputes and tariffs could have consequences for future claims inflation, with higher replacement and repair costs”.

“Wide portions of the market are now characterized by ample capacity, strong competition, and flat-to-modestly-down pricing, with some exceptions for highly volatile products, industries, and geographies,” he said.

More challenging markets for buyers include automobile and U.S. casualty-exposed risks. Aon also reports that areas marked by recent large losses from extreme weather events – such as Canada, parts of Europe, Middle East and Latin America – experienced modest rate increases for natural catastrophe property risks. Japan is the geographic outlier, Aon says, as insurers raised property pricing across the board in a bid to improve profitability.

“The devastating wildfires in California during the first weeks of the year have not diverted the insurance market from the positive trajectory set in motion during the second half of 2024,” the report notes.

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