Abundant capacity and strong competition continue to support favourable conditions for commercial insurance buyers across most major lines of business, with rate reductions, broader coverage and improved terms remaining available across many lines.

However, it comes in the face of rising risks.

Broker Aon has announced the findings from its Q2 2026 Global Insurance Market Insights report, which identified the core risks faced by businesses globally.

According to the report, insurers are increasingly using data, analytics and artificial intelligence to support underwriting decisions and assess risk quality. While capacity and competition remain the primary drivers of market conditions, AI is enabling more granular and informed risk selection.

High-quality risk information is becoming increasingly important as insurers use analytics and AI to make more targeted underwriting and capital deployment decisions.

“AI has not fundamentally changed pricing patterns – yet. Conditions in Q2 have continued to be driven by strong competition and abundant capacity. We do, however, see AI increasingly making pricing more technical, granular and consistent, while underwriting becomes more selective and informed,” explained, Cynthia Beveridge global chief broking officer, Commercial Risk Solutions

The ongoing conflict in the Middle East has resulted in heightened underwriting scrutiny across marine, aviation, terrorism, political violence, energy and trade-related risks. Insurers are placing greater emphasis on policy terms, conditions and exposure management.

The conflict has also reinforced the importance of supply chain resilience, contingency planning and geopolitical risk management, with insurers placing greater emphasis on how organizations identify, manage and mitigate potential disruptions. As volatility persists, many organizations are reassessing their broader risk financing strategies and evaluating how insurance, retained risk and alternative capital solutions can work together to strengthen resilience.

Insurers continued to closely monitor developments in the region, resulting in heightened underwriting scrutiny, reduced appetite for certain exposures and increased pressure on pricing, limits and coverage terms.

“The Middle East conflict is driving a differentiated response across the insurance market,” said Christian Hoffman, CEO of Global Commercial Risk Solutions at Aon. “The most pronounced impacts are in Marine Hull & War, Marine P&I, Aviation, and Terrorism & Political Violence, where insurers are exercising greater underwriting discipline, repricing risk and placing increased emphasis on policy terms and conditions. Despite these pressures, capacity remains available across all lines for well-managed risks.”

The report also warned broader business implications of geopolitical instability, including supply chain disruption, energy price volatility and heightened concerns around contingent business interruption exposures.

Beyond geopolitical developments, the report identified claims inflation as an ongoing concern across property, casualty and specialty lines. Rising labour, transportation and repair costs continue to impact the value of property claims, while liability claims remain affected by higher legal, medical and settlement costs.

These pressures continue to weigh most heavily on commercial automobile and U.S. casualty, which remain notable exceptions to otherwise favourable market conditions.

Taken together, Aon said its study found that current market conditions present an opportunity for organizations to strengthen insurance programs and optimize risk transfer strategies before market conditions tighten.