Commercial insurance market enters period of relative stability, while presenting opportunity for buyers, says Willis report

Rhea-AI Summary

Willis (NASDAQ: WTW) says the commercial insurance market is moving into a period of relative stability and buyer opportunity in its Insurance Marketplace Realities report dated Oct 3, 2025. Key data: industry surplus capital > $1 trillion, reinsurance capacity > $725 billion. Property renewals fell 5.5% in Q1 and 8% in Q2 2025; Workers’ Compensation benefits from a $16 billion reserve surplus. AI adoption is accelerating underwriting, claims and product design. Willis warns that > $100 billion in insured catastrophe losses annually (five years) and systemic cyber, financial, or climate shocks could quickly reverse gains.

Full report: https://www.wtwco.com/en-us/insights/2025/10/insurance-marketplace-realities-2026

Positive

• Industry surplus capital > $1 trillion
• Reinsurance capacity > $725 billion
• Property renewal rates down 8% in Q2 2025
• Property renewal rates down 5.5% in Q1 2025
• Workers’ Compensation supported by $16 billion reserve surplus

Negative

• Global insured catastrophe losses > $100 billion annually (5 years)
• Excess casualty capacity remains excluded/constrained
• Risk of rapid reversal from systemic cyber, financial, or climate shocks

Insights

Market Strategist

Willis report signals a buyer-friendly commercial insurance market driven by large capital cushions and tech-led underwriting improvements.

What it means: The report states industry surplus capital exceeds $1 trillion and reinsurance capacity tops $725 billion, creating broader capacity and enabling more favorable terms for buyers.

Why it matters: Reported declines in renewal rates — 8% in Q2 2025 after 5.5% in Q1 — and a $16 billion reserve surplus in Workers’ Compensation indicate measurable softening in key lines, while AI adoption is improving underwriting speed and risk segmentation.

Monitorable item: Track subsequent renewal-rate releases after Q2 2025 to confirm whether the softening trend extends beyond the quarters cited.

New findings from Willis’ latest Insurance Marketplace Realities report highlight favorable conditions for buyers, driven by abundant capital, advancing technology, and data-driven risk strategies.

NEW YORK, Oct. 03, 2025 (GLOBE NEWSWIRE) -- After years of volatility caused by the pandemic, inflationary pressures, and geopolitical unrest, the commercial insurance industry is entering a period of stability and opportunity, according to the latest Insurance Marketplace Realities report from Willis, a WTW business (NASDAQ: WTW). Backed by industry surplus capital exceeding $1 trillion and reinsurance capacity over $725 billion, insurers are pursuing growth across multiple product lines.

This capital strength is fostering a market environment increasingly favorable to buyers. Property insurance is entering a soft market, with renewal rates declining 8% in Q2 2025 following a 5.5% drop in Q1. Workers’ Compensation also remains favorable, supported by a $16 billion reserve surplus. The combination of ample capacity, excluding excess casualty, and advancing technological capabilities are enabling organizations to secure broader coverage and optimize program structures more effectively than in recent years.

“Buyers are navigating a very different market than just a few years ago,” said Jon Drummond, Global Head of Carrier Management at Willis. “We’re seeing meaningful opportunities for companies to enhance their programs and drive better returns on their insurance spend, even as certain lines remain under pressure.”

Artificial intelligence (AI) is emerging as a defining force in this transformational period. Once a vision of the future, AI is now reshaping underwriting, claims management, and product design. AI-powered tools are delivering deeper risk insights, enabling faster, more informed decisions, and supporting the creation of products tailored to emerging needs.

Despite the improved market landscape, the report urges caution. Global insured catastrophe losses have exceeded $100 billion annually for five consecutive years. Systemic cyber events, financial market shocks, or escalating climate-related disasters could quickly reverse current gains and reintroduce volatility into the commercial insurance market.

As the market shifts from disruption to opportunity, Willis emphasizes that now is the time for strategic action. Buyers who embrace data-driven decision-making, leverage emerging technologies, and partner with trusted advisors will be best positioned to capitalize on today’s favorable conditions while preparing for tomorrow’s risks.

The full Insurance Marketplace Realities report is available at: https://www.wtwco.com/en-us/insights/2025/10/insurance-marketplace-realities-2026 

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

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Contact

Arnelle Sullivan
Arnelle.Sullivan@wtwco.com

FAQ

What did Willis (WTW) report on Oct 3, 2025 about industry capital?

Willis reported industry surplus capital exceeding $1 trillion and reinsurance capacity over $725 billion.

How did property renewal rates change in Q1 and Q2 2025 according to Willis (WTW)?

Willis noted property renewal rates fell 5.5% in Q1 2025 and 8% in Q2 2025.

What did the Willis (WTW) report say about workers’ compensation in 2025?

The report says Workers’ Compensation remains favorable, supported by a $16 billion reserve surplus.

How is AI described in Willis’s Oct 3, 2025 Insurance Marketplace Realities report?

AI is reshaping underwriting, claims management, and product design, delivering deeper risk insights and faster decisions.

What systemic risks did Willis (WTW) warn could reverse market gains in 2025?

Willis warned that systemic cyber events, financial market shocks, or escalating climate disasters could quickly reintroduce volatility.

Does the Willis (WTW) report indicate the market is favorable for insurance buyers in 2025?

Yes — Willis states abundant capital and capacity are creating a market increasingly favorable to buyers, enabling broader coverage and optimized programs.