Buyer-friendly conditions are expected to continue in 2025 across key lines of commercial primary insurance buying, such as D&O and cyber business, according to Aon.
Commercial insurance market conditions continued to ease in the final quarter of 2024, with Aon’s latest Global Insurance Market Insights report highlighting improved capacity, softer pricing, and a return to profitability across several major lines.
Property market conditions continued to ease, with increasing capacity and flexibility, particularly for well-performing, preferred risk types, the report found.
However, the re/insurance broker added “significant caution remained for natural catastrophe exposed risks,” especially those involving secondary perils such as hail or wildfire.
Cyber and directors’ and officers’ liability (D&O) lines also saw improved terms for buyers, driven by “healthy capacity and strong insurer performance.”
However, the broker observed that price reductions in D&O began to decelerate toward year-end.
“Price cuts slowed in D&O as insurers sought sustained profitability,” the report said, indicating a shift towards more measured underwriting after successive quarters of steep discounts.
Casualty markets showed a more fragmented picture. Aon reported that while “some parts of the Casualty market showed signs of easing,” the outlook for risks with US exposure remains difficult.
Factors such as “nuclear verdicts, litigation funding, and aggressive plaintiff bar tactics” are continuing to fuel loss inflation and making insurers more selective.
“Insurers are proceeding with caution,” the report stated, particularly where volatility or systemic risk could erode recent underwriting gains.
It added that underwriters are focusing more intently on risk quality and are less willing to stretch on terms for marginal accounts.
UK follows global trend
In the UK, the tone was similar, with signs that the softening trend has become more firmly established. Aon reported rate reductions across liability, cyber, D&O and property lines, supported by strong competition and “abundant” capacity.
“In general, market conditions across key product lines in the UK softened at some pace during 2024,” said Rob Kemp, head of commercial risk at Aon UK.
He added: “While there are some exceptions, downward pressure on pricing, ample capacity and stable or enhanced cover have become increasingly common.”
The UK outlook for 2025 remains favourable, though Aon flagged that conditions will hinge on two variables: the outcome of upcoming reinsurance treaty renewals and the absence of major loss events. Should either of these break the market’s current momentum, further softening could slow or even reverse.
Still, Aon sees insurer behaviour as a key driver of the market’s current shape.
“Return to insurer profitability combined with the emergence of wide scale insurer growth plans have been key catalysts of this change,” said Kemp.
Overall, the report paints a picture of a market that is becoming more balanced after several years of hardening. But it also stresses that risks around catastrophe exposure and litigation-driven casualty losses have not gone away.
“Buyer-friendly conditions are expected to continue in 2025,” Aon concluded — but with the caveat that loss volatility has the potential to reshape the landscape.
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