Q2 2025: Global Insurance Market Overview

Q2 2025: Global Insurance Market Overview
July 30, 2025 19 mins

Q2 2025: Global Insurance Market Overview

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Buyer-friendly conditions generally continued in Q2, with organizations taking advantage of the market environment by reinvesting savings into program enhancements and loss control measures to strengthen long-term resilience.

Key Takeaways
  1. Geopolitical and systemic risks are escalating, impacting global trade dynamics and insurance markets, necessitating proactive risk management strategies.
  2. Climate and cyber threats are testing resilience; closing the cyber insurance gap is crucial for navigating evolving risks.
  3. Favorable Q2 market conditions offer opportunities to enhance coverage and leverage diverse risk capital solutions to strengthen resilience.

Market Conditions Offer Strategic Opportunities Amid Evolving Global Risks

At the midpoint of 2025, organizations are contending with a risk landscape that is both fast-moving and deeply interconnected. From geopolitical uncertainty to climate volatility and digital disruption, the sources of uncertainty are multiplying, and so are the opportunities for those prepared to act. In the context of this environment, this report is designed to help you navigate emerging risks, capitalize on market conditions, and make better decisions with confidence.

Among the most salient drivers of the Q2 market are geopolitical and systemic risk, as well as climate, cyber and infrastructure threats.

Geopolitical and systemic risk

At the time of writing, the deadline for reciprocal tariffs is quickly approaching, and is expected to have significant implications for price inflation, supply chains, and global trade dynamics. Meanwhile, the turbulent geopolitical environment in the Middle East serves as a stark reminder of the speed at which such events can escalate and the very real implications they carry for risk and insurance. The ongoing Russia-Ukraine war is a case in point: A U.K. court decision in June on coverage for aircraft stranded in Russia due to sanctions will have ramifications for the aviation war risk market as insurers come under pressure to recoup losses and settle similar claims.

Climate, cyber and infrastructure threats

Extreme weather, nuclear verdicts and large supply chain events continue to test resilience. The widespread power outage that affected Spain and Portugal in April is just one example that highlighted the vulnerability of critical infrastructure. At the same time, cyber risk is accelerating and the impact of Artificial Intelligence bringing both risks and rewards is just beginning. Yet cyber remains significantly underinsured. Closing the cyber insurance gap and helping firms navigate this evolving risk remains one of the industry’s most urgent and strategic imperatives.

Market conditions create a window of opportunity

Despite this volatility, Q2 brought favorable conditions across most (re)insurance markets. The second quarter of 2025 saw a broadening of insurer appetite, with most geographies and lines of business benefiting from ample capacity and healthy competition. Property pricing continues to improve, with double-digit price reductions increasingly available, especially on preferred occupancies and those with good loss records. Directors and officers and cyber markets remain soft, and non-U.S. exposed casualty is stable and competitive. However, insurers continue to differentiate and placements with significant U.S. casualty exposure, automobile and certain natural catastrophe perils remain challenging.

Notable market conditions
  • Conditions in the property market continue to improve, with more flexibility around coverage and terms, as well as increasing appetite for natural catastrophe risks. (However, we note that the year began with the California wildfires, “secondary peril” losses have continued unabated, and we are in the early weeks of the Atlantic hurricane season.)
  • U.S. casualty and automobile remain challenging due to adverse claims trends, but capacity continues to be broadly responsive to demand, and options are available to buyers, albeit at higher rates and attachment points.
  • Competition for directors and officers and cyber increasingly presents opportunities for clients to enhance coverage and increase limits.
  • Development of broker-organized facilities, like the Aon Client Treaty (ACT), continues, especially in the London Market.
Strategic levers for clients

Now is the time for clients to take advantage of market conditions. In today’s competitive market, clients will find that insurers are more flexible on terms, and more willing to engage with insureds on enhancements to coverages, limits and attachment points.

At the same time, the diversity of capital and products available to clients continues to expand, with many buyers exploring a combination of captives, parametric triggers, structured and facultative solutions alongside traditional risk transfer. Aon continues to help clients shift from a transactional mindset to a total cost of risk approach, leveraging analytics, alternative capital, and advisory services to manage volatility and unlock strategic value.

Looking ahead

While current market conditions are favorable, they are also fragile and likely to be temporary. The systemic change in loss activity across property, cyber and U.S. casualty continues. Also, there has been fairly limited new capital coming into the traditional (re)insurance market. Large or surprising loss events, in tandem with geopolitical or financial market volatility, could affect a rapid change in insurer appetite for certain risks. Reviewing insurance strategies with this in mind, and considering a wide range of risk capital, will put buyers in a strong position to weather any potential future storms.

Quote icon

Now is the time for clients to take advantage of market conditions. In today’s competitive market…insurers are more flexible on terms…enhancements to coverages, limits and attachment points.

Joe Peiser
Joe Peiser
Chief Executive Officer, Commercial Risk Solutions

Insurance Market Overview

Expand the options below to read a summary of how the insurance market trended in Q2 2025 across pricing, capacity, underwriting, limits, deductibles and coverages.

  Pricing Capacity Underwriting Limits Deductibles Coverages
Asia -1-10% Abundant Flexible Increased Flat Broader
EMEA -1-10% Abundant Prudent Flat Flat Stable
Latin America -1-10% Ample Flexible Increased Flat Broader
North America Flat Ample Prudent Flat Flat Stable
Pacific -11-10% Abundant Flexible Increased Flat Stable
  • Pricing

    Soft market pricing continues across wide swaths of the market including cyber, directors and officers, and increasingly, property. The main geographical exceptions are North America, where pricing is more moderate, and Japan, where insurers, seeking to improve underwriting profitability, have continued to increase rates across-the-board. Property pricing continues its favorable trend, with significant reductions increasingly available, especially for preferred risks. Many local casualty markets are also seeing modest pricing reductions, although U.S. exposed risks and automobile remain more challenging.

  • Capacity

    Capacity is ample-to-abundant, with over-subscription becoming increasingly common for preferred risks. Many markets and lines of business are experiencing increased levels of capacity as incumbent insurers target growth, and with growing competition from new entrants and international insurance markets. More favorable treaty and facultative reinsurance conditions are also bolstering capacity. In contrast, U.S. exposed casualty risks continue to experience more conservative capacity deployment due to adverse U.S. litigation trends. Focused on managing volatility, underwriters also continue to deploy limits cautiously for natural catastrophe exposures.

  • Underwriting

    Overall, underwriting remains disciplined, but increasingly flexible as insurers broaden their appetite and growth ambitions. Underwriters continue to differentiate, with preferred, loss-free and well-managed risks – especially directors and officers and property - experiencing the most favorable and flexible environment. Underwriting is generally more rigorous for casualty and automobile. Detailed, quality data remains key to securing favorable terms from insurers, especially for complex risk placements, those with significant natural catastrophe exposures, and cyber risks.

  • Limits

    Increasingly competitive market conditions and the availability of new risk analytics tools offer clients a timely opportunity to review limit adequacy and reinvest premium savings in the purchase of higher limits that take into account inflationary trends, supply chain complexity, and geopolitical and economic uncertainty. There are, however, some exceptions where insurers are more cautious of offering higher limits, or where buyers are considering limit options to manage challenging risk conditions, such as for U.S. exposed casualty, automobile and some natural catastrophe exposures.

  • Deductibles

    As with limits, many clients are taking advantage of current market conditions to consider deductible options, particularly where increases had been required in recent years, and lower deductibles are often available in the market, especially for cyber and directors and officers. In other pockets, deductibles are increasing, such as for loss-impacted property placements in Asia and Latin America, natural catastrophe risks in Canada, and automobile placements, as insurers respond to higher accident frequency and rising claims costs.

  • Coverages

    Increasing competition in certain lines of business is paving the way for more flexible terms and conditions and the removal of non-concurrent terms from the previous hard market cycle. More restrictive terms are being applied to natural catastrophe property risks in Canada, while casualty underwriters continue to apply PFAS exclusions.

Insurance Product Trends

Expand the options below to read a summary of how the insurance market trended in Q2 2025 across key lines of business, including Automobile, Casualty/Liability, Cyber, Directors & Officers and Property.

  Automobile Casualty/Liability Cyber Directors & Officers Property
Asia Moderate Soft Soft Soft Soft
EMEA Challenging Moderate Soft Soft Soft
Latin America Soft Moderate Soft Soft Soft
North America Challenging Moderate Soft Soft Soft
Pacific Moderate Soft Soft Soft Soft
  • Automobile

    Market conditions vary widely by geography, with the most challenging conditions experienced in the U.S., where adverse loss trends have continued to drive double-digit rate increases for some renewals, and in EMEA, where claims inflation remains a key consideration. While, broadly, insurers remain cautious, there are positive signs. Vehicle repair costs and downtimes remain elevated, but supply chain delays are abating. Pricing is moderating in several markets and competition for preferred risks is gaining momentum. Alternative program structures and fleet risk management actions, such as the use of telematics, are helpful levers in achieving superior placement outcomes.

  • Casualty

    The casualty market remains bifurcated. Product lines and risks that are exposed to the effects of rising U.S. litigation costs and claims severity driven by nuclear verdicts and litigation funding – including international risks with U.S. exposures – face challenging conditions as underwriters continue to evaluate and adjust their underwriting strategies. Outside the U.S., casualty markets are generally seeing healthy competition for domestic risks, with modest price reductions and long-term agreements available for preferred risks. Workers’ compensation in the U.S. is also benefiting from strong insurer appetite, resulting in a buyer-friendly environment.

  • Cyber

    The cyber market continues to benefit from abundant capacity and healthy competition. Despite the ongoing threat posed by ransomware, and concerns for systemic risks and the impact of artificial intelligence, buyer friendly market conditions continue, with modest price reductions and healthy insurer appetite. Underwriting remains robust and risk differentiation is key. Many insureds are using premium savings to purchase additional limits or expand coverage.

  • Directors & Officers

    With an abundance of capacity, the directors and officers market remains buyer friendly. In addition to moderate premium decreases, market conditions allow for coverage enhancements, as well as lower deductibles in some cases. While the overall picture remains favorable for insureds, price reductions are decelerating as insurers focus on the need for sustainable pricing. Insurers are also mindful of the potential impacts of geopolitical and macroeconomic volatility, as well as regulatory changes and litigation trends, including an uptick in security class actions. A small number of insurers have exited the U.S. directors and officers market recently - a development Aon is monitoring.

  • Property

    Conditions in the property market continue to improve. In the U.S., most placements are experiencing double-digit rate reductions, as well as increasing flexibility around coverage and terms. Most other geographies are seeing soft-to-moderate conditions with price reductions increasingly available, while Japan and India are experiencing rate increases following local regulatory changes. With an above normal hurricane season forecast for 2025, natural catastrophe exposures remain a key concern, especially in markets that have experienced recent large losses, such as Canada. However, the availability of capacity, together with competitive pressures, is helping to offset some of these challenges more generally.

Quote icon

By shifting from a transactional mindset to a value-driven approach and effectively leveraging analytics and alternative capital, companies can better manage volatility and unlock strategic value.

Cynthia Beveridge
Cynthia Beveridge
Global Chief Broking Officer, Commercial Risk

Below are five key claims trends and developments we’ve been closely monitoring this quarter.

  • 1. Middle East Conflict Expands: Early Claims Impacts Emerging

    The ongoing conflict in the Middle East has taken a significant turn following Israel’s decision to formally expand the scope to include Iran. While this situation continues to unfold, we have already seen a few notifications tied to this development. If this situation further escalates, the broader consequences and the resulting impact on claims remains uncertain, especially as nations weigh positions of neutrality, support, or condemnation. As the situation evolves, potential implications for political violence, political risk, trade credit, and specialty lines will be closely watched.

  • 2. Trade Tariffs and Claims Inflation: Impacts Reaching Property Lines

    Trade tensions, particularly those involving U.S. tariffs and retaliatory measures by global trading partners, are impacting claims — especially through price inflation. These tariffs are beginning to show a measurable impact across supply chains, with insurance-linked costs rising accordingly. For example, the latest Crawford report on tariffs and claims inflation indicates that homebuilding costs in the U.K. may increase by an average of £10,000 per unit. This is just one example, but the consequences are far-reaching. With tariffs on raw materials impacting claims across commercial lines, Baker Tilly is projecting U.S. auto insurance premiums could rise by as much as 19% by end of 2025 due to repair and parts costs rising.

  • 3. Russia-Ukraine War: Aercap Aviation Ruling Raises Questions for Market Stability

    Following the U.K. Commercial Court’s decision in the Aercap case relating to aircraft stranded in Russia due to sanctions, it remains to be seen whether the (re)insurance markets will respond by increasing premiums and making terms more restrictive. The case could serve as a bellwether for future disputes in the aviation and war risk markets, and its ripple effects may impact how similar claims are evaluated and reserved globally.

  • 4. Cyber Risk: Rise of Deepfakes Demands Heightened Awareness

    Cyber continues to be one of the most dynamic and fast-evolving classes of risk. The rise of deepfake technology has moved from theoretical concern to tangible threat, with clear implications for claims. Fraudulent videos, emails, and voice recordings are being used to deceive employees and manipulate decision-making. Clients are strongly advised to invest in regular training, update firewall protections, and enforce strict verification protocols to reduce the likelihood of costly errors resulting from digital impersonation.

  • 5. Claims Insights: The Challenge Insurers Face

    Insurers continue to prioritize investment in enhanced IT systems which can leverage claims data and harvest valuable insights. However, many still face challenges due to reliance on multiple legacy systems and manual processes, making it difficult to amass consistent and meaningful data for tracking trends. We have seen significant momentum among major insurers who recognize the importance of claims data, the value of broker insights during system development, and the use of AI to automate routine processes for less complex claims.

As always, we will continue to monitor these and other developments to support our clients with timely insights and practical guidance. In a world of increasing uncertainty, the ability to respond swiftly and strategically to claims-related challenges has never been more important.

Quote icon

Geopolitical instability, macroeconomic pressures, and a rapidly evolving risk environment continued to shape the global claims landscape in Q2. The interplay of these forces is producing complex consequences for insurers and clients alike.

Mona Barnes
Mona Barnes
Global Chief Claims Officer

Insurance Market Trends by Region

Expand the options below to read a summary of regional insurance market trends from Q2 2025.

For more detailed analysis including claims trends, download and read the full report here.

  • Asia
    • Insurers are keenly supporting new opportunities to win business as they aim to deliver premium growth in a softening market
    • New and existing capacity continues to drive a competitive environment in Asia, enabling clients to negotiate more favorable pricing and coverage.
    • Sums insured are under renewed scrutiny as geopolitical volatility may materially impact replacement costs.
    • The devastating earthquake in Myanmar, which caused at least 5,400 deaths and significant infrastructure damage, underscores the importance of being prepared for catastrophe-related risks.
    Q2 Asia Market Dynamics
      Overall Pricing Capacity Underwriting Limits Deductibles Coverages
    Asia Soft -1-10% Abundant Flexible Increased Flat Broader
    Q2 Asia Product Trends
      Automobile Casualty/Liability Cyber Directors & Officers Property
    Asia Moderate Soft Soft Soft Soft
  • Europe, Middle East and Africa
    • Competition continues to strengthen as insurers expand their appetites and focus on growth. Insurers that recently entered the market offering follow or excess capacity are now interested in lead positions, creating more lead insurers for buyers to choose from on certain risks.
    • Across much of EMEA capacity is plentiful and conditions are favorable for buyers, although conditions vary by class of business and industry segment.
    • Automobile and risks with U.S. casualty exposure are key exceptions to the favorable market conditions. These risks are experiencing focused appetite, underwriting scrutiny and limited availability of capacity.
    • The combination of tariffs, regional conflicts, inflation and technology continue to create significant uncertainty related to supply chains, loss costs, and geopolitical risk. Clients are advised to leverage analytical tools, such as Aon Risk Analyzers, to re-evaluate risk and adapt insurance programs accordingly.
    Q2 EMEA Market Dynamics
      Overall Pricing Capacity Underwriting Limits Deductibles Coverages
    EMEA Soft -1-10% Abundant Prudent Flat Flat Stable
    Q2 EMEA Product Trends
      Automobile Casualty/Liability Cyber Directors & Officers Property
    EMEA Challenging Moderate Soft Soft Soft
  • Latin America
    • The insurance market is benefiting from economic growth and stability in Latin America which is helping drive additional demand for insurance. Lower inflation in some countries is providing a more predictable environment for insurers to operate, resulting in more competitive rates.
    • The digital transformation is enabling insurers to offer more sophisticated products and improve customer service through technology-driven solutions such as online platforms and data analytics.
    • Natural catastrophe exposures continue to impact insurer underwriting strategies and risk assessment.
    Q2 Latin America Market Dynamics
      Overall Pricing Capacity Underwriting Limits Deductibles Coverages
    Latin America Soft -1-10% Ample Flexible Increased Flat Broader
    Q2 Latin America Product Trends
      Automobile Casualty/Liability Cyber Directors & Officers Property
    Latin America Soft Moderate Soft Soft Soft
  • North America
    • Market conditions are broadly moderate in North America, although the environment for well-managed and preferred risks is increasingly favorable.
    • California wildfires and severe convective storm events at the start of this year have not caused significant market dislocation. However, loss activity for the remainder of 2025 will be closely monitored following $52 billion of global insured catastrophe losses in the first quarter, the second highest Q1 on record.
    • The oversubscription of capacity in the property market is driving prices down, as insurers with significant growth targets contribute to a softening landscape.
    • Casualty insurers continue to focus on adverse loss trends and the effects of social inflation
    Q2 North America Market Dynamics
      Overall Pricing Capacity Underwriting Limits Deductibles Coverages
    North America Moderate Flat Ample Prudent Flat Flat Stable
    Q2 North America Product Trends
      Automobile Casualty/Liability Cyber Directors & Officers Property
    North America Challenging Moderate Soft Soft Soft
  • Pacific
    • Inflation has eased, although the overall outlook is uncertain due to the global impact of U.S. trade policy, which could impact economic activity, investment, confidence and growth in the region.
    • The surge in construction insolvencies and labor shortages in Australia are dampening expectations that construction costs will fall.
    • More frequent and severe natural catastrophes are driving clients to seek a better understanding of their future climate risk as part of their investment and divestment strategies.
    Q2 Pacific Market Dynamics
      Overall Pricing Capacity Underwriting Limits Deductibles Coverages
    Pacific Soft -11-20% Abundant Flexible Increased Flat Stable
    Q2 Pacific Product Trends
      Automobile Casualty/Liability Cyber Directors & Officers Property
    Pacific Moderate Soft Soft Soft Soft

To see our full analysis of market conditions and our advice to clients, download the report here.

General Disclaimer

The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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