This briefing note summarises key insights from the Q1 2025 insurance market updates provided by Aon, Marsh, WTW, Gallagher and Lockton with a specific focus on Australian trends.
The Q1 2025 insurance market in Australia mirrors global trends of softening rates and increased capacity, particularly in property and financial lines. However, natural catastrophe exposures and liability risks remain areas of caution. Brokers are advising clients to leverage favourable conditions to renegotiate terms, while also preparing for regulatory shifts (e.g., Latent Defects Insurance (LDI) in construction) and emerging litigation risks.
From a global market position, Australia stands out for its strong property rate reductions, innovative product launches (like LDI) and growing use of analytics and digital tools to navigate a complex and evolving risk landscape.
Global Markets Comparison
|
Broker |
Market Sentiment |
Pricing Trend |
Capacity |
Key Focus Areas |
|
Aon |
Stable, selective in CAT zones |
Flat to modestly down |
Strong, but cautious in high risk areas |
Alternative risk transfer, resilience |
|
Marsh |
Broad |
Global -3% |
High, especially in property and cyber |
Competitive pricing, |
|
WTW |
Buyer friendly |
Downward pressure |
Competitive, |
Analytics, digital placement, client strategy |
|
Gallagher |
Tech-driven, cautious on liability |
Report was not rate focused |
Report did not include commentary on insurer capacity |
AI, litigation risk, InsurTech |
|
Lockton |
Most favourable in years |
Falling across most lines |
Strong, except liability |
Resilience, Latent Defects Insurance (LDI) innovation in Australia |
Australia Specific Insights (Q1 2025)
Broker | Australia Specific Highlights |
Aon | Australia saw moderate softening in most lines, with natural catastrophe exposed property (e.g. bushfire prone areas) facing tightened terms, including higher deductibles and sub-limits. |
Marsh | The Pacific region (including Australia) experienced a 9% decline in property rates, the largest globally. Cyber and financial lines also saw rate reductions, while casualty remained flat to slightly up. |
WTW | Emphasised favorable conditions for buyers in Australia, with opportunities to expand coverage and challenge pricing. Analytics and digital tools like Gemini are being used to improve placement efficiency. |
Gallagher | Focused on social inflation and litigation trends impacting liability pricing. While not Australia specific, these trends are increasingly relevant in the local market due to rising class actions and litigation funding. |
Lockton | Introduced Latent Defects Insurance (LDI) capacity to the Australian market, especially in NSW, aligning with upcoming regulatory mandates. This is a major development for the construction sector. |
Strategic Considerations
In light of the current insurance market conditions and emerging trends, the following strategic considerations are proposed:
Optimise Coverage and Renegotiate Terms
- Review existing insurance programs to identify opportunities for enhanced coverage and reduced
- Consider multi year agreements or alternative risk transfer mechanisms to lock in favourable
Explore Mutual Structures and Aggregate Deductibles:
- Commission feasibility studies for mutual insurance structures to improve long term cost efficiency and
- Assess the balance between retained risk and insurer profitability to achieve sustainable
Strengthen Insurer Relationships
- Maintain continuity with high-performing insurers while exploring new capacity and market
- Nurture relationships to secure favourable terms and ensure long-term support, especially in liability and safeguarding
Leverage Data Driven Placement and Risk Modelling
- Use risk modelling to better understand exposure and inform underwriting decisions.
- Integrate data insights into renewal strategies and risk financing decisions.
Stay Vigilant on Emerging Risks and Insurer Appetite
- Track shifts in insurer appetite, especially in areas like cyber, liability, and CAT exposed
- Maintain awareness of social inflation and litigation funding trends impacting liability
- Develop internal risk registers and scenario planning to anticipate and mitigate emerging
References
Aon
Q1 2025: Global Insurance Market Overview
Global Insurance Market Insights (Quarterly Series)
Marsh
Global Insurance Market Index – Q1 2025
Lockton
Life Sciences: 2025 Insurance Market Update
Lockton Analyzes 2025 Insurance Market Shifts, Rates, and Reinsurance
Gallagher / Gallagher Re
Global InsurTech Report Q1 2025
Gallagher Examines the Top Insurance Trends for Q1 2025
Willis Towers Watson (WTW) / Willis
Global Insurance Marketplace Insights Q1 2025 (Podcast Series)
Insurance Marketplace Realities 2025