‘The property and casualty insurance market will remain challenging, with many business lines seeing rates decline due to plentiful capacity and robust competition,’ says analyst
The insurance sector is facing “economic and industry-specific tailwinds and headwinds” that are leading to varied growth prospects across different business lines, according to a new report from credit rating agency S&P Global Ratings.
The report, released on 12 September 2025, cited “economic uncertainty, regulatory changes and increasing consolidation” as challenges for insurers in a competitive market.
The property and casualty (P&C) market was forecast to remain challenging, with rates set to continue declining due to high capacity and competition among insurers.
And while commercial property insurance is forecast to generate underwriting profits in 2025, a return to losses in 2026 is expected as softening continues.
Commercial casualty insurance, however, saw less softening in 2025, though claims inflation will continue to put pressure on insurers’ margins.
Laura Jimenez, credit analyst at S&P Global Ratings, said: “The property and casualty insurance market will remain challenging, with many business lines seeing rates decline due to plentiful capacity and robust competition.
”This will put pressure on insurers’ profitability.”
Motor and home
Meanwhile, motor insurance, which has seen both sustained rate drops and repair cost inflation over the past year, is expected to post an overall combined operating ratio (COR) of under 100%, due to earlier rate rises and low weather-related claim counts.
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The report also highlighted home insurance rates have been lagging behind those for motor products and that the line now shows increased signs of softening – and high levels of weather related claims – though large insurers continue to post profits.

He graduated in 2017 from the University of Manchester with a degree in Geology. He spent the first part of his career working in consulting and tech, spending time at Citibank as a data analyst, before working as an analytics engineer with clients in the retail, technology, manufacturing and financial services sectors.View full Profile
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