The global insurance industry is heading towards a “progressively softer market environment,” with pricing momentum deteriorating across most European and US property and casualty (P&C) lines, according to a recent Autonomous report.

While the report states that this is not yet a “full-blown soft cycle,” as only the UK & Ireland is in this state; most P&C markets are “experiencing stable or gently moderating pricing after historic hard markets in previous years.”

“In our view, pricing still remains broadly supportive of measured growth for European underwriters,” analysts added.

The report highlights varied pricing conditions across Europe, with the UK & Ireland standing out as the most challenging environment, labelled as the only region currently in a “soft state”.

For the UK & Ireland, momentum is negative, with Axa and Allianz both recording pricing declines in their P&C books for the region. Allianz, notably, recorded negative pricing changes in the UK for the first time since 2016.

In Germany, motor insurance is a market to keep an eye on, as rates are dropping quickly after previously being one of the hardest markets. Now, momentum has “roll over”, with a significant step-down in rates reported by price comparison websites.

Conversely, the French market remains a “bright spot,” and is still in a hardening state, the report noted. This is particularly positive for domestic giants Axa and Allianz, who hold strong franchises there.

In Southern Europe, Spain and Italy continue to offer the strongest prospects outside of France, with a re-acceleration of rates noted in Spain.

Swiss motor insurance rates have increased significantly more than home insurance rates over the last 18 months, which is only just beginning a steady recovery after years of flat rates.

However, experts expect home insurance price increases to speed up next year as delayed adjustments finally filter through the market in the region. Despite these shifts, major insurance companies offering multiple types of coverage have kept their overall pricing stable since the beginning of the year.

Across the Atlantic, the picture is becoming more complex. While US commercial property pricing continues to soften, a more worrying trend is emerging in the casualty space.

For the first time in nine quarters, pricing momentum in US commercial casualty was negative across the board.

This “rolling over” of rates is raising red flags because it is ulcer if premiums have risen enough to cover the costs of “social inflation” – the rising costs of insurance claims resulting from increased litigation and larger jury awards.

“We believe this requires monitoring as it is unclear whether pricing has risen enough to address social inflation issues in this class, a topic that still frequently comes up in broker commentary,” analysts stated.

The report highlighted Zurich Insurance Group as the multi-line insurer most exposed to the shifting US dynamics.

Among the major insurers, Autonomous stated that Axa remains well-positioned due to its exposure to the hardening French market, although its commercial lines are facing headwinds.

Allianz is also benefiting from the French market but is facing its first pricing declines in the UK in nearly a decade. While Beazley remains the most exposed to the cyber insurance market, which has been soft for ten quarters.

However, the report notes that there are “green shoots” indicating that cyber pricing may finally be bottoming out.

Regarding US carriers, Travelers, The Hartford, and W.R. Berkley appear to be holding up better than their European peers in the US, maintaining mind-to-high single-digit rate increases.

Despite the softening trends, the immediate financial outlook remains stable. Autonomous believes that earnings for the rest of 2025 will be “sufficiently underpinned” by the rate increases already secured earlier this year.

It stated: “Momentum deteriorated broadly across the board this quarter, with over 20 lines in our dataset experiencing moderating momentum, with only a handful going up. There are some bright spots, namely France (particularly home), alongside Spain and US auto lines (particularly commercial).

“Overall, we still feel the environment is broadly supportive to underwriters with exposure earnings in 2025 sufficiently underpinned by rate increases this year, but there will be growing pressure over 2026 margins if trends continue.”