Taking advantage of the insurance market softening: Opportunities for brokers and clients

Find out how the softening insurance market presents both challenges and possibilities for wholesale and retail brokers and their business clients, with a particular focus on commercial property and construction.

As we move ahead into 2025, a noticeable softening is occurring within the global insurance market. For retail and wholesale brokers, and their commercial clients, especially in the areas of property and construction insurance, this creates both challenges and opportunities. In this article, we explore what market softening means, why it matters, and how you can position your business to benefit from these changes. Partnering with an expert like Costero Brokers, with our deep expertise and established relationships in the London and European insurance and reinsurance markets, can provide the edge you need to thrive in this evolving landscape.

Why is the insurance market softening?

The insurance market is cyclical, and it is in the phase where we are seeing it ‘soften’. This is being triggered because the capital base is increasing for individual insurance companies due to the profitability of the last year, additionally the Insurance Treaty market at 1/1 have offered lower attachments and lower costs of reinsurance.

In addition to this over the last few years, lower claims and improved risk management has led to insurance companies lowering their premium rates and expanding coverage options with increased competition among insurance providers. It means buyers usually find it easier to get better deals and more favourable terms.

Today’s softening market: an overview

According to a wide range of industry observers, the global insurance market began to soften in late 2024, and this has continued in early 2025. This shift follows several years of hard market conditions characterised by rising premiums, stricter underwriting, and capacity constraints.

In recent months, key market indicators such as property catastrophe reinsurance indices and renewal rates began to show clear declines. (Source: Insurance Business).

The insurance industry’s annual renewals for January 1st, 2025 provided fresh evidence, with the latest data highlighting a notable decline in property catastrophe reinsurance rates – the first since the bottom of the previous soft market in 2017. (Source: Artemis)

Analysts estimate that at the 1/1 renewals, loss-free risk-adjusted rates across a diversified reinsurance portfolio fell by around 6%. They highlight that rate adequacy remains “very attractive” in property classes. (Source: Reinsurance News)

One of the contributing factors that has driven this is the Catastrophe storms of 2024, Hurricane Milton, Hurricane Helene and Hurricane Berryl did not cause the losses expected from the market and compared to the recent years (Source: Insurance Business). Further to this there has been a steady increase in the rates over the last few years in the market due the hard market (Source: Leader’s Edge)

Similarly, recent analysis of the market points to a “new phase of favourable conditions”, suggesting more competitive pricing for insurers in the coming year (source: Insurance Business).

The possible opportunities of a softer market

• Lower premiums: Falling rates mean you can potentially secure more competitive premiums for your clients. This is particularly beneficial for large-scale commercial property or construction projects where insurance costs can represent a significant portion of budgets.

• Increased market capacity: With insurers and reinsurers willing to take on more risks this advantageous for clients with complex or high-value portfolios that previously faced difficulties in obtaining coverage and limits. We have seen insurers widen their appetite, ie: habitational portfolios, risks in more catastrophe exposed areas and heavier industries such as steel and iron works, are all within target sectors.

• Negotiation power: As the market becomes more competitive, you gain leverage to negotiate broader policy terms and more comprehensive coverage on behalf of your clients. Gaining more flexibility to find tailored solutions for your clients.

Benefits of Partnership during a Softening Market:

• Client loyalty: It’s vital to ensure the financial stability of carriers you work with, benefit from the price reductions on a long term scale. London wants to partner with their clients for the future and to retain the business, and they will prioritise their long-term clients with the most beneficial pricing.

• Long Term Certainty and Continuity: by partnering with Costero Brokers, we can provide stability and continuity in pricing. This allows budgeting for insurance for your clients year on year allowing businesses to plan for the future. Partnering with Costero and the London Market mitigates the extreme peaks and troughs that we have seen some clients suffer from in the last few years.

• Long Term Quality: Partner with a Costero who look for the long-term projection and look at the wider priorities and needs of your clients. Always offering comprehensive coverage no matter what the cycle, focusing on quality as well as price for the client.

Finding your expert partner for an evolving insurance market

In a market experiencing significant change, having the right partner is critical. Costero Brokers brings unmatched expertise in all key insurance areas, including commercial property and construction, supported by robust relationships with the London and European reinsurance markets. Here’s how we can help you take advantage of the softening market.

Costero is not restricted to using specific markets, unlike larger brokers who have contingent commission arrangements with key insurers to restrict marketing.

Key Benefits:

1. Expertise in complex risks

We offer a wide range of insurance solutions to meet the complex needs of retail and wholesaler brokers. For instance, our Property team specialises in securing solutions for commercial property such as office buildings, retail spaces, or industrial facilities, our team can navigate the softening market to deliver competitive and comprehensive coverage tailored to their unique needs. Our team has over 40 years experience, and experience of seeing the market change and experience of how to navigate client needs within the a softening market for the long term.

Similarly, our Construction insurance division has deep experience in managing the intricate risks associated with large-scale projects, from infrastructure developments to residential builds. We offer bespoke Builder’s Risk Insurance solutions, and see growing demand in areas such as Frame and Renovation projects. By leveraging the softening market, we help you secure broad coverage that ensures your clients are protected from start to finish.

By capitalising on the softening market and utilisation of long-term partnerships and showing loyalty to the insurance panel.

2. Strong market relationships

Our long-standing relationships with leading insurers and reinsurers – at Lloyd’s of  London, London, European and worldwide markets – give us access to a wider range of options. This allows us to secure competitive pricing and favourable terms that might not be available through other channels.

3. Navigating market complexities

While the softening market offers opportunities, it also presents complexities. Our team is skilled at navigating these challenges, ensuring you and your clients receive the right balance of affordability, security and reliability.

4. Tailored support for brokers and MGAs

We understand the unique pressures faced by retail brokers and MGAs. That’s why we work as an extension of your team, providing personalised support to help you meet your clients’ needs while strengthening your own business relationships. Whether you need assistance with underwriting, claims, or market insights, we’re here to help.

Move ahead to get more from the softening market

In summary, the softening insurance market of 2025 offers exciting opportunities for retail brokers, and their commercial clients, particularly in property and construction. But taking full advantage requires expert guidance, strong connections and market insight. That’s where Costero can make all the difference.

We need to understand your requirements to best capitalise on the softening market, what are your priorities;

1. Lower price
2. Better coverage

Clients must think long term and to the future of when the market changes again and what will your compromises be to get the better pricing in the future when we see the market harden in the future.

To learn more about opportunities in the softening insurance market and discuss your goals, get in touch with our expert, Cordelia Powell at Costero Brokers.

Please be advised: This is not a guarantee that the market will continue to soften.