Aon sees improved insurance terms with rising capacity in Q2 2025

Improved terms were seen in property, cyber, and D&O lines.

A rare softening in the insurance market with increased capacity and lower pricing across many lines is expected, according to Aon’s Q2 2025 Global Insurance Market Insights report. 

However, the firm warns this window may be short-lived as systemic risks — including geopolitical tensions, climate volatility, and cyber threats — continue to rise.

Improved terms were seen in property, cyber, and D&O lines, with US property placements recording double-digit rate reductions. 

Most regions saw premium declines between 1% and 10%, with the Pacific experiencing up to 20% reductions. North America remained flat.

Despite the soft conditions, Aon flagged ongoing deterioration in US casualty and cyber losses. 

The limited influx of new capital also leaves the market exposed to rapid shifts if a major event occurs.

Geopolitical tensions and trade tariffs are pushing up claims costs. Climate risks are also intensifying, with H1 2025 insured catastrophe losses reaching $100b — the second-highest on record. 

Infrastructure weaknesses and wildfire events are contributing to mounting exposures.

Cyber threats are also growing more sophisticated, even as pricing softens. Buyers are using savings to increase coverage, but insurers remain cautious about systemic loss potential.