By Chris Munro

July 17 - (The Insurer) - Insurance and reinsurance pricing continued to soften in Q2 2025 even though “there is a rising cost of risk environment” in the U.S., according to Marsh McLennan CEO John Doyle.

During prepared remarks on Marsh McLennan’s second-quarter 2025 earnings call, Doyle noted that overall rates continued to decline over the period, particularly in property insurance and property catastrophe reinsurance.

Addressing analysts, Doyle said “insurance and reinsurance markets, for the most part, continue to soften a bit in the second quarter.”

There were “pretty stable or consistent price decreases through the first half of the year” in reinsurance, largely driven by property.

Doyle said on the retail side, there is also rate pressure on property.

The “big exception” to segments seeing pricing pressure, Doyle said, is in excess casualty because of the challenging litigation environment.

Doyle said “it's a high cost of risk to operate here in the United States,” with the liability environment just one aspect, alongside more of the country’s economy and population exposed to extreme weather events.

“Healthcare-related risk continues to escalate quite a bit as well,” he added.

“At a time when our country is focused on investing in infrastructure and investing in technology, these are meaningful costs on our clients.”

In casualty, Doyle expects pricing to remain under pressure for clients and rates to continue to rise.

And in property, prices are down even with the active catastrophe activity during the first half of 2025, although Doyle expects that over time, pricing will track along with the growing cost of risk in the U.S.

“It's difficult to predict over a six-month or 12-month period, but there's no question in my mind, there's a rising cost of risk environment here in the United States,” Doyle added.

As per the Marsh Global Insurance Market Index, commercial insurance rates decreased 4% in the second quarter, which Doyle said was driven by property despite a surge in catastrophe losses in the first six months of 2025. That reduction followed a 3% decline in Q1 2025.

Rates in the U.S. overall were flat, while in Latin America, Europe, UK and Asia they were down mid-single digits. The Pacific was down double digits, said Doyle.

Global casualty rates increased 4%, with U.S. excess casualty up 18% reflecting the challenging liability environment.

Workers’ compensation decreased by 4%, while global property rates decreased by 7% year over year compared with a 6% decrease in Q1 2025.

Global financial and professional liability rates decreased 4% with cyber down 7%.

In reinsurance, Doyle said midyear renewal rates decreased by 5% to 15% for non-loss affected programs.

“A moderate increase in client demand was offset by reinsurers increasing capacity as well as increased ceded cat bond issuance,” Doyle said.

“The cat bond market is on pace for a record year of issuance with over 50 new bonds in the first half, involving approximately $17 billion of limit,” he added.

U.S. casualty reinsurance renewals “were largely stable”, Doyle commented, with sufficient capacity reflecting primary carriers’ underwriting actions.

As previously reported, Doyle on the call also said that Marsh McLennan is committed to working with the business community and policymakers to tackle the challenging U.S. litigation environment. He said that clients cannot buy enough excess liability coverage in the current market conditions.

Marsh McLennan for the second quarter reported quarterly adjusted earnings per share of $2.72, up 11% year over year and ahead of analysts’ expectations. Underlying revenue rose 4%, in line with the mid-single-digit guidance provided during its first-quarter earnings call.