This Just In …
Commercial Insurance Rates Stabilizing in 2025, but Some Industries Face Challenges
After several years of sharp premium increases, the commercial insurance market is expected to experience rate stabilization in 2025, according to AM Best. While insurers have faced economic volatility, rising claims costs, and evolving risk landscapes, strong underwriting performance and risk-adjusted pricing strategies have contributed to a more stable outlook for the industry.
Key Factors Driving Rate Stabilization
- Improved underwriting discipline – Insurers have refined their pricing models, leading to more predictable premium adjustments.
- Moderate pricing gains – While some industries may still see modest price hikes, overall rate increases are expected to be less severe than in previous years.
- Economic resilience – Growth in net premiums written has been supported by strong economic performance, helping insurers maintain profitability.
Industries Facing Continued Rate Pressures
Despite the stable outlook, certain sectors may still experience higher premiums, including:
- Commercial auto insurance – Due to rising claims severity and social inflation, rates remain under pressure.
- Directors & Officers (D&O) liability – Increased litigation risks continue to drive higher pricing.
- Property insurance – Catastrophe-exposed regions may see continued premium increases due to climate-related risks.
Overall, while rate stabilization is a positive development for businesses, insurers remain cautious about emerging risks and market uncertainties.
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