The numbers are hard to ignore. Australian commercial insurance rates dropped sharply in Q4 2025, with Marsh reporting a 12% fall in Pacific commercial cover – the steepest decline since rate reductions began in early 2024. Further softening is expected across many commercial lines through 2026, driven by strong capacity and competition among carriers.
For brokers, that’s a meaningful shift. But the way you handle a softening market will either strengthen your client relationships or quietly erode them.
The opportunity is real – if you use it properly
Quality risks genuinely do have negotiating power right now. Australia is currently leading the commercial rate decline globally, and in property, liability, and D&O especially, there’s room to deliver genuine premium reductions and improved terms for well-presented risks.
That’s a good conversation to have with clients. The problem is when the conversation stops at the premium line.
The risk brokers often miss
When rates fall, clients notice. And some will use that as an invitation to quietly reduce coverage – lifting deductibles, cutting sub-limits, trimming BI indemnity periods – to bring the total spend down even further. On the surface, it looks like a win. On paper, the bill is lower.
But the gap between the headline premium and what clients are actually covered for has a habit of widening in soft markets. Replacement costs haven’t fallen. Recovery times haven’t shortened. If anything, business interruption exposures are more complex now than they were two years ago.
A client who saved 15% on their commercial property premium by reducing their sum insured and shortening their BI period hasn’t necessarily made a good decision. They’ve just deferred the problem.
How to use the softening market well
The smarter play is to use rate relief to fix the underinsurance problems that built up during the hard market. In practical terms: if a client’s premium is going to drop, that’s the moment to have a conversation about lifting sums insured to reflect current rebuild costs, extending BI indemnity periods to match actual recovery timelines, or tightening wordings and sub-limits that were quietly eroded in previous cycles.
You’re not asking them to spend more. You’re asking them to spend the same – or less – on better coverage.
That’s a genuinely valuable conversation. And it’s one that requires underwriting knowledge, placement experience, and the confidence to push back when a client wants to chase the cheapest option.
Where we come in
At Better Broker, our placement support and access to underwriting insight through our team are specifically designed to help ARs navigate markets like this one – identifying the right opportunities, structuring submissions well, and having the coverage conversations that protect clients rather than just passing on a lower invoice.
A softening market rewards brokers who are genuinely advising. Reach out if you’d like to talk through how we support that.