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Auto, US casualty and D&O show the soft market is fraying
Aon says US-exposed casualty and higher D&O layers are standing out as insurers stay cautious amid claims inflation and rising bodily injury awards.
Commercial insurance buyers are still getting favorable terms as the market remains broadly soft, but conditions are starting to show cracks, with auto, US-exposed casualty, and higher D&O layers increasingly where underwriting caution is most visible first, according to the latest quarterly market check from Aon.
Aon’s Q2 2026 Global Insurance Market Overview characterizes the overall environment as one of record industry capital and abundant capacity, with rate reductions and favorable terms continuing for most well-managed risks across property, casualty, and cyber. Marsh’s UK data aligns with that picture, showing commercial rates down 8% in the second quarter, while property alone fell 11%, figures Marsh says match the prior quarter.
Globally, Marsh’s Global Insurance Market Index recorded a 6% average fall in worldwide commercial rates during Q2 for the eighth straight quarter of decline, with property again driving most of the drop, down 12%. Aon’s underwriting view similarly shows pricing down between 1% and 10% across Europe, the Middle East, and Africa, where capacity is described as abundant and underwriting remains flexible for most classes.
Aon, however, flags clear limits to the easy-market narrative. It notes that automobile and US casualty are standout exceptions, with claims inflation and higher bodily injury awards keeping insurers cautious on capacity, pricing, and deductibles. Cynthia Beveridge, Aon’s global chief broking officer for commercial risk solutions, said competition and capacity still set price, while AI is making underwriting more selective and informed even though headline pricing patterns remain soft.