The insurance market across Europe, the Middle East, and Africa (EMEA) is experiencing a notable softening, with price reductions increasingly available for preferred and well-managed risks across most geographies and lines of business, driven by abundant capacity and aggressive competition, according to an Aon report.
The overall favourable pricing trend is particularly strong in property and cyber insurance, where significant rate reductions are observed for good risks.
However, not all lines are benefiting, Aon warns. Pricing continues to increase for challenging areas such as automobile insurance, higher-risk property occupancies, and casualty risks with significant US exposure.
Insurers are maintaining strong underwriting discipline, particularly for these challenging risks and clients with a poor loss history.
For Directors and Officers (D&O) insurance, while pricing is still decreasing, there are growing indications that the rate of reduction is slowing down, the broker noted.
The strong competition is creating opportunities for clients to secure better terms, including exploring higher limits, which remain generally flat; lower deductibles, which aslo remain flat, although insurers are increasingly willing to consider reductions, especially for preferred risks; and enhanced coverages, especially in non-US exposed casualty, cyber, and D&O.
Insurers are keen to grow, but disciplined risk selection still applies, requiring complete risk information and continued investment in loss prevention from clients to secure superior terms.
The availability of long-term agreements, according to the report, is also allowing some clients to lock in current favourable pricing.
In general, capacity is abundant for most lines, although there are pockets of constraints, such as automobile – which also continues to experience rate increase-, US casualty and challenging occupancies in property, where insurers are looking to manage volatility around business interruption and natural cat exposures.
In some cases, capacity constraints are being offset by new entrants and insurers ambitious growth targets. The greater use of facultative reinsurance by insurers is also contributing to capacity.
Despite the generally soft market, global insured natural cat losses exceeded $ 100 billion in the first half of 2025, and although EMEA was less affected than other regions, European losses still surpassed the 10-year average.
In response, some European governments, including Italy and Greece are expanding or introducing compulsory natural catastrophe insurance requirements, and France has increased its premium levy.
Clients looking to mitigate higher pricing or potential coverage restrictions related to nat cats are turning to solutions like parametric and facultative reinsurance.
The report noted that “the recent trade agreement between the EU and the US may lead to a reassessment of business interruption insurance values in the event of changes to insureds operations, customers and/or suppliers.”
“Despite a challenging risk landscape, softening conditions prevail ahead of year-end and 1/1 renewals, especially for well-managed risks with a good claims record. This favorable environment provides insureds with the opportunity to reinvest in risk management and wider sustainable insurance protection with the support of advanced risk analytics and consulting services,” Erlantz Urbieta Chief Broking Officer Commercial Risk Solutions EMEA.
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