Navigating the 2025 Insurance Market: Key Trends to Watch

The insurance market in 2025 is undergoing major shifts. With premiums fluctuating across industries, increased regulatory pressure, and a greater focus on proactive risk management, businesses need to stay informed to ensure they have the right cover in place.

Here are three of the key trends shaping the insurance landscape this year:

1. Premiums Are Moving Across the Board

Several sectors are seeing significant shifts in premiums due to factors like inflation, claims inflation, and supply chain disruptions:

• Commercial property insurance premiums have increased by an average of 12% year-on-year, especially in high-risk or disaster-prone regions.
• In the past 18 months, professional indemnity premiums have either remained flat or dropped by as much as 20%.

As the general insurance market in Australia is forecast to grow to over $146 billion by 2029, businesses should actively review their policies to avoid overpaying and ensure appropriate cover for their risk profile.

2. Regulatory Pressure is Growing

In 2025, several new compliance measures are impacting how insurers assess and approve coverage:

• APRA’s CPS 230 Operational Risk Management standard takes effect from 1 July 2025, requiring insurers and financial services businesses to have strong operational risk frameworks in place.
• The Financial Accountability Regime (FAR) commences for insurers on 15 March 2025, increasing individual accountability for decision-makers.

These regulatory updates are already leading to stricter policy exclusions and higher premiums for businesses that can’t demonstrate compliance or strong governance practices. Partnering with a knowledgeable broker can help businesses stay ahead of these changes.

3. Risk Management Pays Off

In a high-cost insurance environment, businesses are investing more in proactive risk strategies:

• A recent survey found that 44% of Australian firms reduced their insurance premiums by 5–15% by improving their cyber risk posture.
• APRA data shows that businesses with structured risk management frameworks are more likely to receive favorable insurance terms and experience fewer claims disputes.

Whether it’s implementing workplace safety programs, cyber resilience plans, or disaster mitigation strategies, insurers are rewarding businesses that can demonstrate control over their risks.

Need help navigating your insurance options?

PLI Brokers helps businesses align their risk management approach with the latest insurance trends. Get in touch today for a policy review or strategic advice.

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