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Despite heightened geopolitical uncertainty and evolving risk exposures, commercial insurance buyers continued to benefit from favorable market conditions in Q2. Abundant capacity, strong competition and record levels of industry capital supported buyer-friendly conditions across most major lines of business. However, insurers remained disciplined in their deployment of capital, carefully managing their exposure to increasingly complex risks, shifting liability trends, climate-related events and geopolitical volatility. The growing use of artificial intelligence across the insurance value chain contributed to more informed underwriting decisions and greater risk differentiation.
Differences in appetite, pricing and terms continued to vary by line of business, geography and risk type. Abundant capacity and healthy competition drove further price reductions and improved terms in most markets for property, casualty and cyber. Financial lines remained buyer-friendly, although conditions continued to moderate in several geographies. Auto and U.S. casualty remained the clear outliers to soft-market conditions, as loss trends and claims inflation sustained insurer caution around capacity deployment, underwriting and pricing.
While overall market conditions remained favorable in Q2, geopolitical volatility continued to create significant disruption across several specialty lines and regions. Insurers continued to closely monitor developments in the region, resulting in heightened underwriting scrutiny, reduced appetite for certain exposures and increased pressure on pricing, limits and coverage terms. The conflict has also reinforced the importance of supply chain resilience, contingency planning and geopolitical risk management, with insurers placing greater emphasis on how organizations identify, manage and mitigate potential disruptions. As volatility persists, many organizations are reassessing their broader risk financing strategies and evaluating how insurance, retained risk and alternative capital solutions can work together to strengthen resilience.
“The Middle East conflict is driving a differentiated response across the insurance market. The most pronounced impacts are in marine hull & war, marine P&I, aviation, and terrorism & political violence, where insurers are exercising greater underwriting discipline, repricing risk, and placing increased emphasis on policy terms and conditions. Despite these pressures, capacity remains available across all lines for well-managed risks,” says Christian Hoffman, Global Chief Executive Officer, Commercial Risk Solutions.
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At the same time, insurers are increasingly using data, analytics and artificial intelligence to support underwriting decisions and portfolio management. While market conditions continue to be driven primarily by capacity, competition and loss experience, these technologies are helping insurers assess risks more efficiently and differentiate more precisely between them. As a result, high-quality risk data, clear submissions and demonstrable resilience are becoming increasingly important factors in achieving favorable renewal outcomes.
“AI has not fundamentally changed pricing patterns – yet. Conditions in Q2 have continued to be driven by strong competition and abundant capacity. We do, however, see AI increasingly making pricing more technical, granular and consistent, while underwriting becomes more selective and informed,” says Cynthia Beveridge, Global Chief Broking Officer, Commercial Risk Solutions.
In closing, at the midpoint of 2026, the commercial insurance market remains a source of stability in an uncertain world. Abundant capacity and strong competition continue to create favorable conditions across much of the market. Insurers are leaning on AI, advanced analytics and richer data to differentiate risk and deploy capital more selectively. This is making the quality of an organization’s risk information an increasingly important factor in renewal outcomes. For buyers, the current market environment presents a strategic, albeit likely temporary, opportunity for risk managers to challenge program structures, limits, retentions and policy wordings, as well as to explore where alternative risk transfer strategies can enhance resilience and capital efficiency. This window of opportunity will narrow if casualty trends, reserve pressure, catastrophe losses or geopolitical volatility erode insurer profitability or intensify concerns over rate adequacy, leading insurers to retrench. Organizations that use today’s conditions to strengthen both program design and the quality of their risk data will be better positioned when market conditions tighten.
Expand the options below to read a summary of how the insurance market trended in Q2 2026 across pricing, capacity, underwriting, limits, deductibles and coverages.
| Pricing | Capacity | Underwriting | Limits | Deductibles | Coverages | |
|---|---|---|---|---|---|---|
| Asia | -1-10% | Abundant | Flexible | Increased | Flat | Stable |
| EMEA | -1-10% | Abundant | Flexible | Flat | Flat | Stable |
| Latin America | -1-10% | Abundant | Prudent | Increased | Flat | Stable |
| North America | Flat | Ample | Prudent | Flat | Flat | Stable |
| Pacific | -1-10% | Abundant | Flexible | Increased | Decreased | Broader |
Buyer-friendly pricing has generally continued, although outcomes have varied widely based on the line of business, geography and type of risk. Abundant capacity and healthy competition in Q2 resulted in soft market conditions for property, casualty and cyber. Well-performing property risks continued to see double-digit price reductions in many regions, including North America. Directors and officers pricing remained favorable but has moderated in EMEA and showed signs of firming for higher-risk sectors in the U.S. Notable exceptions to the buyer-friendly conditions in Q2 were commercial automobile and U.S. umbrella where pricing continued to experience upward pressure due to ongoing adverse claims trends.
Capacity has remained abundant, with oversubscription common for preferred, well-managed property and casualty placements. Insurers’ ambitious growth targets, favorable reinsurance conditions and competition from new entrants and international markets have led many insurers to offer increased line sizes and limits, as well as to expand to sectors that were previously outside their appetite. Capacity has, however, remained more limited for U.S. automobile and lead umbrella coverages, higher-risk occupancies and some large natural catastrophe exposed property. The build-out of data centers worldwide is increasing demand for capacity, presenting both an opportunity and a structural challenge for the insurance market.
Healthy competition has supported a generally flexible underwriting environment, and improved terms and conditions were available in Q2 for preferred and well managed risks, especially for property, casualty and cyber. However, underwriting has remained more stringent for certain risks, sectors and lines of business, including automobile and U.S. casualty, as well as high-hazard occupancies and risks with large natural catastrophe and business interruption exposures. In addition, underwriting criteria for war, political violence and certain marine/energy risks have tightened in light of ongoing geopolitical instability. Insurers have doubled down on risk selection, making greater use of data, analytics and AI to help triage submissions, differentiate between risks and support underwriting decisions.
Limits were largely flat in Q2, although increased limits and sub-limits were generally available, especially for competitive lines of business, including property, casualty and cyber. Many insureds continue to take advantage of market conditions by reinvesting premium savings to build resilience. For U.S. automobile and lead umbrella, limits remain under pressure. Insurers have continued to carefully manage large natural catastrophe and business interruption exposures.
While deductibles have remained broadly flat, reductions are available for some placements with good loss history and strong risk management controls, especially in competitive lines like cyber and property. Deductibles have, however, remained under scrutiny for automobile, U.S. casualty and catastrophe-exposed property, as well as for risks with weaker controls, poor claims experience or limited risk information. Some buyers have made adjustments to manage pricing and capacity dynamics in more challenging lines, such as umbrella insurance. Where clients have already optimized deductibles, some have explored self‑insurance solutions to achieve further premium reductions.
Coverages have been generally stable, although broader coverage remains available, especially for property, directors and officers and cyber risks. With growing competition in the market, insurers have been open to targeted enhancements and removal of coverage restrictions applied during the previous hard market. In cyber, insurers have continued to improve key coverage features, particularly around privacy liability and business interruption. By contrast, casualty insurers in Q2 continued to impose exclusions or tighten restrictions for PFAS, sexual abuse and misconduct, biometric and other data-privacy exposures. War, political violence, marine and energy coverages exposed to the Middle East have also been affected by geopolitical events.
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Casualty Risk Management and Insurance
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Findings from Aon’s Global Risk Management Survey
Expand the options below to read a summary of how the insurance market trended in Q2 2026 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 | Moderate | Soft | Soft | Moderate | Soft |
| Latin America | Soft | Soft | Soft | Soft | Soft |
| North America | Moderate | Moderate | Soft | Moderate | Soft |
| Pacific | Moderate | Soft | Soft | Soft | Soft |
The commercial automobile insurance market has remained moderate with renewal outcomes shaped by fleet profile, geography, claims experience and data quality. Capacity remains broadly adequate, although pricing has continued to increase for many placements due to claims inflation, including higher bodily injury awards and vehicle repair costs. Insureds with unfavorable loss experience or more complex risk profiles — such as public transport, haulage and fleets with significant hired and non-owned exposures — have experienced the greatest upward pressure on pricing and deductibles. In the U.S., automobile has remained one of the most challenging primary lines of business and is subject to heightened underwriting scrutiny. Conditions have been more favorable in Latin America, and pricing and terms have begun to moderate in parts of EMEA as competition has strengthened for well-managed fleet risks. In some cases, well-performing fleets that have provided quality data have achieved modest pricing reductions.
Renewal outcomes in the casualty insurance market have continued to vary widely by line of business, geography and risk profile. In much of the world, conditions have been favorable, with ample capacity and competition leading to modest pricing reductions for well-managed risks. The notable exceptions are U.S. general liability and umbrella liability where the market has remained firm and shaped by disciplined underwriting. Elsewhere, insurers have continued to differentiate, rewarding high-quality risks with improved terms and pricing, but taking a more cautious stance for complex liability exposures, high-hazard industries, U.S.-exposed and loss-affected risks.
Conditions in the cyber insurance market have remained soft with modest price reductions, broad coverage and higher limits available for well-managed risks in most territories. However, persistent ransomware activity, digital supply chain incidents, longer-tail cyber business interruption losses and unfavorable development on prior years’ privacy liability claims have contributed to a moderation in pricing, most notably in the U.S. While favorable market conditions have persisted, insurers remain cautious of systemic risks, catastrophe scenarios, evolving threat actor tactics, supply chain vulnerabilities and the expanded use of AI by both cyber criminals and insureds. At the same time, insurers have continued to evolve coverages to support faster and more predictable recoveries.
The directors and officers market has remained favorable for buyers, although price reductions have moderated in several parts of the market. In the U.S., pricing has remained close to flat, and there have been signs of firming for higher-risk sectors and increased pressure for middle and higher excess layers. Insurers have sharpened their focus on emerging claims drivers and remain cautious on issues such as cybersecurity, data privacy, geopolitics and AI. Placements for stressed sectors and those with weaker controls have also seen sharper differentiation by underwriters. Capacity has remained ample, but the impact of insurer consolidation is being closely monitored.
The property market has continued to offer buyers a favorable environment characterized by ample capacity, increased competition and generally declining pricing. As competition has intensified, insurers have increased their appetite for some industries that were previously regarded as less desirable. Underwriting has remained flexible overall, with some insurers being open to increased limits and adjustments to deductibles. Insurers have also been more willing to offer coverage enhancements and to revisit some hard market coverage restrictions. There are growing indications that the market may be resistant to continued downward pricing pressure, with insurers expressing concerns that recent rate reductions have outpaced underlying risk economics, leading some insurers to exercise greater underwriting discipline or selectively reduce participation. While a near term market correction is not anticipated, renewal results are expected to become increasingly differentiated based on individual risk quality, catastrophe exposure, and loss performance. Organizations that continue to invest in risk mitigation, resilience, and transparent insurer engagement are likely to remain best positioned to capitalize on favorable market conditions. Challenging pockets remain, including certain high-hazard occupancies and large natural catastrophe exposures. Generally, well-protected risks with detailed exposure data, strong risk engineering, business continuity plans and clean loss records have typically achieved superior renewal outcomes.
Below are four key claims trends and developments we’ve been closely monitoring this quarter.
Insurers continue to invest in artificial intelligence and digital claims tools to accelerate decision-making, streamline processes, and improve efficiency and accuracy. To date, these tools have been used primarily to triage claims and reduce administrative burden rather than make claims settlement decisions. At the same time, increased automation is raising the risk of eroding claims expertise or under-resourcing claims teams, with the potential to increase frictional costs. “The winners in the next decade won’t be the insurers that strip the most cost out of claims, but those that combine intelligent automation and global capabilities with deep, front line claims judgment”, says Mona Barnes, Global Chief Claims Officer, Commercial Risk Solutions.
Clients, too, are expanding their digital capabilities, with risk managers looking to increase control and transparency around claims trends and performance, particularly for higher-volume claims. Clients with large captives are taking advantage of access to digital claims capabilities through third party adjusters. At the same time, a growing number of start-ups have been offering claims management software. As more claims data is shared with third parties, robust data sharing processes and infrastructure have become increasingly important.
Claims inflation has remained a consistent theme across property, casualty and specialty lines, driven by elevated repair, transport and labor costs on the property side, and increased awards, medical and legal defense costs for liability. This trend has been further exacerbated by the conflict in the Middle East, which has caused a sharp spike in energy and fuel prices, alongside disruption to supply chains for petrochemical and other goods from the region. Claims notifications from the conflict are continuing to arise. Marine, energy, war, terrorism and political violence coverages have been impacted by losses related to physical damage and business interruption from missile and drone strikes and falling debris. Contingent business interruption and loss of attraction coverages have also been affected. Clients are advised to keep all documentation and records of steps taken when a loss occurs and engage with their broker early, so that coverage under impacted policies is protected.
As pricing in commercial property and casualty lines has come under growing pressure, insurer approaches to claims have shifted. Insurers continue to seek to differentiate through claims capabilities and by demonstrating strong alignment between claims and underwriting. Paradoxically, some insurers have taken tougher stances on large and complex claims, even as they continue to position claims service as a point of differentiation. In many cases, the focus has remained on attritional claims, rather than on larger, more complex losses that tend to leave a more lasting impression on clients, although both situations are important.
Commercial insurance buyers have placed increasing emphasis on claims when selecting insurers, reflecting a more sophisticated understanding of how policies perform in practice. Many clients have become less willing to transact with insurers perceived as difficult to work with on claims and have instead favored working with insurers that are seen as practical and supportive during a crisis.
Clients are advised to consider claims performance – particularly, flexibility and claims payment history – as part of the overall risk transfer strategy, not just when a loss occurs.
They should evaluate the potential trade-offs between price and faster, smoother claims settlement, especially where larger, complex claims issues may arise. Program design has also increasingly reflected claims experience, including differentiating between high-frequency losses and one-off large events when setting limits and retentions.
Expand the options below to read a summary of regional insurance market trends from Q2 2026.
For more detailed analysis including claims trends, download and read the full report here.
Positive Developments
Challenging Developments
| Overall | Pricing | Capacity | Underwriting | Limits | Deductibles | Coverages | |
|---|---|---|---|---|---|---|---|
| Asia | Soft | -1-10% | Abundant | Flexible | Increased | Flat | Stable |
| Automobile | Casualty/Liability | Cyber | Directors & Officers | Property | |
|---|---|---|---|---|---|
| Asia | Moderate | Soft | Soft | Soft | Soft |
Positive Developments
Challenging Developments
| Overall | Pricing | Capacity | Underwriting | Limits | Deductibles | Coverages | |
|---|---|---|---|---|---|---|---|
| EMEA | Soft | -1-10% | Abundant | Flexible | Flat | Flat | Stable |
| Automobile | Casualty/Liability | Cyber | Directors & Officers | Property | |
|---|---|---|---|---|---|
| EMEA | Moderate | Soft | Soft | Moderate | Soft |
Positive Developments
Challenging Developments
| Overall | Pricing | Capacity | Underwriting | Limits | Deductibles | Coverages | |
|---|---|---|---|---|---|---|---|
| Latin America | Soft | -1-10% | Abundant | Prudent | Increased | Flat | Stable |
| Automobile | Casualty/Liability | Cyber | Directors & Officers | Property | |
|---|---|---|---|---|---|
| Latin America | Soft | Soft | Soft | Soft | Soft |
Positive Developments
Challenging Developments
| Overall | Pricing | Capacity | Underwriting | Limits | Deductibles | Coverages | |
|---|---|---|---|---|---|---|---|
| North America | Moderate | Flat | Ample | Prudent | Flat | Flat | Stable |
| Automobile | Casualty/Liability | Cyber | Directors & Officers | Property | |
|---|---|---|---|---|---|
| North America | Moderate | Moderate | Soft | Moderate | Soft |
Positive Developments
Challenging Developments
| Overall | Pricing | Capacity | Underwriting | Limits | Deductibles | Coverages | |
|---|---|---|---|---|---|---|---|
| Pacific | Soft | -1-10% | Abundant | Flexible | Increased | Decreased | Broader |
| 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.
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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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