Global property softening met by underwriting discipline and rising ART interest: Aon

According to broker Aon, underwriting discipline remains intact despite the softening global re/insurance property market, as firms continue to prioritise risk selection and technical pricing, driven by heightened concerns regarding climate-driven natural catastrophes, secondary perils, and evolving geopolitical risks.

At the same time, the broker also outlined that despite the softer market conditions, insureds continue to demonstrate a strong interest in alternative risk transfer solutions.

In its recently published Q1 2026 Global Insurance Market Overview, Aon detailed how an influx of capacity and heightened competition are driving price reductions across most geographies, with several markets, including large-account U.S. property, experiencing double-digit decreases.

“Capacity is abundant overall, driven by strong insurer profitability and favorable reinsurance conditions following the 1/1 renewals. Competition is intense as incumbent insurers and newer players seek to retain business and achieve ambitious growth targets, particularly in property and non-U.S. exposed casualty,” Aon said.

“Many large risks are also experiencing increasing competition from international insurers, notably the London market. Insurers are increasingly looking to write larger line sizes while also showing greater willingness to deploy capacity for complex and higher-hazard risks when supported by robust underwriting information.”

Whilst there is ample capacity in the market overall, Aon noted that the availability of capacity is still more limited for U.S.-exposed casualty risks, certain commercial automobile risks, and property and casualty risks in Japan.

On the back of favourable 1/1 treaty reinsurance renewals, Aon observed that property insurers entered 2026 with strong balance sheets and ambitious growth targets, accelerating the ongoing softening of the global commercial property insurance market.

The broker also went on to explained that competition is particularly intense for well-performing, data-rich risks, with insurers expanding their appetite and increasingly competing on both pricing and coverage. As a result, this has led to greater availability of capacity, higher limits, and broader terms and conditions, even extending into more complex and historically challenged occupancies.

“Despite these softer market dynamics, underwriting discipline remains intact. Insurers continue to prioritize risk selection and technical pricing, reflecting heightened concerns around climate-driven natural catastrophe activity, secondary perils, and evolving geopolitical risks,” Aon added.

However, regional dynamics remain uneven across the global property market.

Japan stands out as a key exception to the softening trend. A combination of strict underwriting, elevated catastrophe exposure, and limited capacity continues to drive double-digit rate increases. Conversely, in China, while the market remains competitive, new regulatory shifts are expected to encourage more sophisticated underwriting approaches and increasingly risk-differentiated pricing over time.

Interestingly, the softer market conditions has not dampened interest in alternative solutions, according to Aon.

“Despite softer market conditions, insureds continue to show strong interest in alternative risk transfer solutions as a strategic hedge against future market tightening,” Aon said.

Adding: “Many are using this favorable environment to educate themselves and implement scalable structures — such as parametric solutions, structured risk programs, and the strategic use of reinsurance through captives — to help mitigate volatility when market conditions shift.”