Insurance premiums drop by 4% in Q2 2025, marking the fourth straight quarter of decreases in commercial insurance rates worldwide
The global commercial insurance market is experiencing a shift, with rates generally decreasing in Q2 2025. According to the Marsh Global Insurance Market Index, the average global commercial insurance rates fell by 4% in Q2, marking the fourth consecutive quarterly drop.
This softening trend is attributed to intensified competition among insurers internationally, providing reduced pricing and broader coverage options. John Donnelly, President of Global Placement at Marsh, commented on the increasing competition, highlighting it as the main catalyst behind the rising market capacity, more favorable rates, and broader coverage options.
In the US, the market showed mixed signals. While global rates declined, U.S. rates were mostly flat overall. Notable declines were observed in property insurance, down 9%, due to aggressive competition among insurers and lower reinsurance costs. Large accounts saw the most pronounced rate moderation, with average premium increases slowing to 2.9% from 5.3%. Small and medium accounts experienced moderate rate increases, slightly up from Q1.
Lines like workers compensation continued to see rate declines, and other liability lines such as cyber, directors and officers (D&O), and employment practices liability also experienced modest rate drops. Rate changes by line were nuanced, with umbrella liability rates rising faster, but commercial auto and general liability rates softening compared to previous quarters.
The Pacific and the UK regions experienced the largest composite rate decreases, at 11% and 6% respectively. The US rate was flat, but all global regions except the US experienced year-over-year composite rate decreases in Q2.
The Global Insurance Market Index, a report by Marsh, is a significant source of information for understanding global commercial insurance trends. The index provides data snapshots on global commercial insurance rates for various quarters, including Q4 2024, Q3 2025, and Q3 2023.
Cyber insurance rates decreased by 7% in Q2, with declines seen in every region. Financial and professional lines rates also decreased by 4% globally in Q2, with rates remaining flat in the US.
In conclusion, the commercial insurance market in Q2 2025 is characterized by a softening trend globally and in the US, intensified insurer competition causing rate declines or smaller increases, especially for large accounts and property insurance. Carriers appear to adjust pricing variance by account size and line of business as competitive pressures increase.
- The softening trend in the global commercial insurance market has extended to personal-finance matters, as investors view this market shift as an opportunity for wealth-management, considering the reduced pricing and broader coverage options.
- As the average global commercial insurance rates fell by 4% in Q2 2025, finance experts anticipate that investing in businesses offering insurance services might yield significant returns, given the market's increasing capacity and more favorable rates.
- Amidst the decreasing cyber insurance rates (7% drop in Q2), coupled with the drops in financial and professional lines rates (4% globally in Q2), it becomes crucial for businesses engaged in wealth-management or personal-finance to carefully assess their investment strategies, taking these trends into account.
