Global insurance rates declined 4% in the fourth quarter of 2025, according to the latest Marsh Global Insurance Market Index, marking the sixth consecutive quarter of declines.
This downward trend was supported by significant insurer capacity, driven by reinsurer growth and the entry of new insurers.
Competition has been intensified by this influx of capital, leading insurers to offer more favourable terms, broader coverage, and lower premiums to retain and win clients.
While the global trajectory is downward, the United States remains an exception. US rates were flat after a prior quarter decrease of 1%. In contrast, the Pacific region experienced the steepest composite rate decline at 12%.
Product lines saw varied levels of relief, with property and cyber leading the downward trend. Property insurance rates fell 9% globally, with the Pacific region seeing the largest decrease of 14%.
Financial and professional lines rates decreased by 4% globally, with declines in every region except the US, where rates were flat. Cyber insurance rates declined by 7% globally.
The most significant headwind for global risk managers remains US Casualty, WTW noted, which saw rates jump 9% in Q4, driven by a litigious legal environment and massive “nuclear” jury awards.
While new capacity has entered the US excess casualty market, demand continues to outpace supply, leading to sharper hikes in excess layers compared to primary lines.
“While US composite rates were flat, most other regions experienced a sharper rate decline,” John Donnelly, President, Global Placement, said.
In this environment, many organisations are moving beyond traditional insurance. Clients with strong risk profiles are increasingly leveraging the competitive market to negotiate improved terms, enhance coverage, and explore alternative risk transfer solutions such as self-insurance and captives.
“Globally, clients are increasingly using captives to retain risk, a strategy that aligns with the strong results seen in the broader insurance market, though captive use may increase vulnerability to large loss events,” Donnelly stated.
Concluding: “Overall, clients continue to benefit not only from declining rates but also from opportunities to negotiate improved terms and conditions. Competition among insurers is expected to intensify. One driver, among the many, could be lower reinsurance costs. Barring an extremely large catastrophe loss, or series of losses, global rates will likely continue to trend downward.”
