Global commercial insurance rates dropped by an average of 3% in the first quarter of 2025, marking the third consecutive quarterly decline, according to the Global Insurance Market Index released by Marsh, a business of Marsh McLennan. The latest figures continue a trend that began in early 2021, reversing nearly seven years of rising rates.

The report highlights increased insurer competition as the primary driver behind the downward trend in rates, which declined across all regions and most major product lines. This continues the moderating trend that began in early 2021, representing a shift in market conditions favourable to insurance buyers.

The UK and Pacific regions experienced the most substantial composite rate decreases at 6% and 8% respectively, while US rates fell by a more modest 1%. Many clients have capitalised on the increasingly competitive environment to negotiate improved terms, enhance coverage, and explore alternative risk transfer solutions.

“Driven by increased insurer competition and favourable reinsurance pricing, global commercial insurance trends continued to improve for our clients in the first quarter,” said John Donnelly, president of global placement at Marsh. “We expect the overall trend to continue, and for insurer competition to intensify, barring unforeseen changes in conditions.”

The report reveals significant variations across different insurance lines. Property rates declined 6% globally, with the US and Pacific regions experiencing the largest decreases at 9% each, followed by the UK at 6%. Financial and professional lines rates decreased by 6% globally, with cyber insurance similarly declining by 6%.

However, casualty insurance bucked the trend with rates increasing by 4% globally, driven largely by an 8% rise in US casualty premiums. This increase is attributed to the severity of claims and large jury verdicts – sometimes called “nuclear verdicts” – which have prompted underwriters to reduce their line sizes and tighten available capacity.

Marsh notes that despite the overall positive trends, insurance pricing can reverse suddenly due to various factors, including major catastrophic events. The upcoming North American tropical storm and hurricane season remains a potential concern that could affect market conditions.

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