Property insurance rates declined by 7% across the globe in the second-quarter of 2025, with buyers securing generally more favourable terms and broader coverage options as capacity rises, with decreasing reinsurance costs seen as a factor fuelling the softening, according to broker Marsh.
John Donnelly, President, Global Placement at Marsh commented, “Global insurance rates declined 4% in the second quarter of 2025, marking the fourth consecutive quarter of decline in Marsh’s Global Insurance Market Index. Declines were experienced in most regions and product lines. The composite rate declined in all regions except in the US, where the rate was flat.
“In the second quarter, clients generally benefited both from reductions in pricing and improved coverage options. Major insurers had ambitious growth targets and generally experienced favorable conditions, including reinsurance pricing, which contributed to high levels of competition.”
Donnelly added that, “The property insurance rate declined in every region,” while also noting that, “Despite the softening global market, clients also explored alternative risk financing strategies, such as self-insurance, parametric coverage, and captive insurance options.”
Concluding that, “With both new and established insurers vigorously competing for business, we expect the overall trends to continue throughout 2025, barring unforeseen changes in conditions. Greater insurer competition is typically experienced by clients not only in rates, but also in opportunities to negotiate improved terms and conditions.”
Property insurance rates were down 7% globally in Q2 2025, but fell by 9% in the United States and 13% in the Pacific region, while other areas of the world saw rates decline by between 4% and 7%, Marsh’s data shows.
In the United States, the 9% property insurance rate decline was the same as seen in the first-quarter of this year.
Marsh noted the influence of reinsurance capital on this, saying property rate declines are being “driven by increased insurer competition and decreasing reinsurance costs.”
Insurance clients are achieving improved outcomes, alongside reduced pricing, with coverage enhancements more readily available in the softening market, in the form of higher limits, revised definitions, and lower deductibles.
In addition, Marsh said its US insurance clients are also embracing alternative risk transfer such as parametrics more, but the broker also cautioned that, “Although pricing improved and more options were available, a significant natural disaster could rapidly alter the environment.”
In the UK, insurer competition is also driving rates, with property falling 6% and we assume reinsurance costs having decreased this would also be a driver there.
Heightened competition and greater capacity are also a factor in property insurance across Latin America and the Caribbean, with property rates down 7% across the region, but as much as by 15% to 20% in Peru, Marsh noted.
Rate declines were also seen in property insurance across Europe, with a 4% decline across that continent in Q2 2025. Competition between insurers was again cited here.
For the Pacific region, property insurance rates declined 13%, reflecting high levels of insurer competition, Marsh said, with higher limits and reduced deductibles achieved by buyers of protection.
Asia also saw a 5% decline in property insurance rates for Q2, while interest in risk transfer alternatives is rising there, Marsh said.
While in Canada, even insurance buyers exposed to significant natural catastrophes achieved rate decreases, Marsh said, with the rate across Canada down 6% and competition again said to be the main driver of this.
Finally, for India, Middle East, and Africa, property rates dropped 5% as competition rose, although in India some clients experienced meaningful increases of as much as 25%, the broker reported.
Marsh said that, “Regional players and multinational reinsurers fostered competition, leading to rate declines, particularly in the Middle East and Africa.”
The Q2 2025 commercial insurance market update from Marsh is particularly interesting, as it characterises the property insurance market as particularly softening globally, albeit with some differentiation still seen.
Rising competition between primary insurers, as well as some global reinsurance carriers that write direct business, seems to be the main driver.
But, this is being at least in part fuelled by the softer reinsurance pricing seen in 2025.
Which suggests that, absent any major catastrophe losses, the property insurance market could continue on this trend through the rest of the year, as carriers absorb and pass on some of the benefits of cheaper reinsurance pricing.
