The insurance market cycle that brokers grew up with - everything hardening together, everything softening together - no longer describes how commercial insurance pricing actually behaves across Australia and the Asia-Pacific, according to Terence Williams (pictured), head of commercial risk for Asia-Pacific at Aon.

Williams made the point during an interview with Insurance Business and his argument lands at a strange moment for the market. Rates are falling almost everywhere, yet the risks underneath them - catastrophe, geopolitics, supply chains, unprecedented project scale - keep growing. If Williams is right, the familiar question brokers ask at renewal, "is the market hard or soft?", is now the wrong question. The right one is: hard or soft for which line, in which country, for which client?

"You have this conundrum where volatility, risk and challenges continue to amplify, but equally we're seeing pricing come down and availability of capacity going up," Williams said.

The headline numbers support the softening half of that conundrum emphatically. Global commercial insurance rates fell 5% in the first quarter of 2026 - the seventh consecutive quarterly decline - and the Pacific region, dominated by Australian business, recorded the steepest drop of any region at 12%, with Pacific property rates down 14%, according to Marsh's Global Insurance Market Index for the first quarter of 2026. Asia declined a gentler five per cent.

But averages, on Williams' telling, are exactly what brokers should stop trusting.

One market, many cycles

"It used to be everything went up and everything came down," Williams said.

Not anymore. Within the same softening headline, individual countries and product lines are running their own weather systems. Williams points to Japan, where fire rates are still rising 5% to 10% even as earthquake rates fall; to India, where a construction boom has pulled property rating down sharply over recent quarters; and to Korea, moving similarly - while other markets simply hold steady.

"I'd describe it now as micro-rating around the world," he said.

Australia supplies some of the most vivid evidence. The Australian construction insurance market has softened markedly, with Marsh's Construction Insurance Market Update 2025 recording premium reductions averaging five to 15% in the first half of 2025 - contract works down around 5%, design and construction professional indemnity down about 10% - after years of increases. Yet within that same softening construction market sit pockets of genuine hardness: capacity for subsea construction works, relevant to projects such as the Marinus Link interconnector, remains restricted enough that IB has described it as a micro-hard market of its own.

The pattern repeats across other Australian lines. EBM Insurance & Risk's Insurance Market Trends and Outlook report, released in May 2026, found the Australian commercial market remained soft through the first half of 2026 across property, liability, financial lines and cyber but with sharply divergent outcomes: weather-exposed properties and clients with adverse claims histories still saw flat pricing or modest increases, while agriculture remained among the most challenging sectors. Globally, US casualty is the loudest counter-current, up 9% in the quarter per Marsh's Pacific and global rate data, even as every region's composite fell.

What micro-rating means for brokers

For brokers, the practical consequence is that portfolio-level generalisations are losing their value. A client with Japanese fire exposure, Australian contract works and US casualty in the same programme is simultaneously in three different markets. Renewal strategy, remarketing decisions and client expectations need to be set line by line and geography by geography and the clients best placed to capture the soft conditions, on the evidence of both Marsh and EBM, are those with quality submissions, clean claims records and demonstrable risk management.

Williams is not disputing the data showing the overall direction is down - rates across product lines are broadly coming off. His point is subtler: The tide is going out but every beach has its own rips.