Kathmandu. Insurance buyers are benefiting from one of the most competitive markets in years. This benefit is being realized with ample capacity, extensive coverage, and double-digit rate reductions across many sectors.
However, Aon’s Q3 2025 Global Insurance Market Insights report warns that market fragmentation, persistent loss trends, and systemic risks could limit the longevity of these favorable conditions. According to Joe Pacer, CEO of Commercial Risk Solutions at Aon, competition is driving down prices and expanding coverage for well-managed risks. “Volatility in property, cyber and US casualty insurance remains a concern,” he said.
Major markets such as the US, UK, Continental Europe, Korea, Australia and Latin America recorded double-digit rate reductions on property, cyber and director and officer (D&O) insurance. With both new entrants and established insurers following the growth and oversubscription to preferred risks now commonplace, capacity is expanding. Oversubscription to preferred risks is now commonplace.
Conversely, underriding is cautious in areas with destructive or high-damage activity. Property and cyber insurance have experienced the biggest price drops in markets other than the US. However, accident insurance has experienced less decline. Rising litigation costs are impacting the results.
Motor insurance is an exception. Rising claims and maintenance costs are driving up motor insurance rates worldwide.
“The severity and frequency of losses in property, cyber and U.S. casualty insurance continues to grow,” Aon said in a statement. The company has attributed the current softening in property insurance to a ‘pricing correction’ rather than a fundamental change in the market.
Insurance markets in Asia-Pacific, Middle Eastern Europe and Latin America have been soft. However, risk management capabilities remain strong. With the exceptions of the U.S. and Japan, accident and property insurance, respectively, have faced a tough time.
Cyber insurance has become one of the biggest risks globally. The number of claims is rising amid growing systemic risks. “Climate change, supply chain disruptions and geopolitical instability are impacting claims trends and increasing market uncertainty,” Aon said.
AON’s report identifies 4 key forces shaping the risk landscape: business, technology, weather, and workforce. Aon urged companies to use current savings to expand coverage, invest in resilience, and strengthen long-term risk management strategies.
