This Just In …
The Property &Casualty Insurance is showing signs of softening, especially after several years of steep rate hikes:
- Average premium increases across all account sizes were 4.2% in Q1 2025, down from 5.4% in Q4 2024.
- Commercial property rates rose just 2.6%, one of the lowest increases in recent quarters.
- General liability rates are still climbing, but at a slower pace—averaging 3.95% in February, down from 4.19% in January.
This cooling is largely due to increased competition, new capital entering the market, and improved underwriting results, especially in personal lines.
Sector-Specific Insights
Here’s how different lines are behaving:
| Sector | Pricing Trend (2025) | Notes |
|---|---|---|
| Commercial Property | Softening | More competition, reduced deductibles, and new capital inflows |
| General Liability | Slight increases | Social inflation still driving litigation costs |
| Workers’ Compensation | Decreasing (avg. -2.6%) | Most profitable line; rates declining for 15+ years |
| Personal Auto | Stabilizing | Underwriting profits normalizing; rate increases tapering |
| Excess Casualty & D&O | Vulnerable to reserve pressure | Still facing adverse development and litigation exposure |
Forecasts from AM Best & Others
- AM Best reports that workers’ comp remains highly profitable, but warns of rising medical costs and litigation severity, especially in California.
- S&P Global expects combined ratios to improve slightly in 2025 (98–100), with premium growth around 8–9%.
- Swiss Re forecasts stable ROE (~10%) for the P&C industry, with underwriting margins narrowing but investment income offsetting losses.
In workers’ comp, wage inflation is pushing up premiums, but claim severity—especially medical costs—is the bigger concern. Some carriers are tightening underwriting for high-risk accounts, while well-performing risks may still see flat or declining rates.
Cybercrime in the U.S. — Escalation and Adaptation
Three Key Terms Business Insurance Policyholders Should Understand
The State of D&O Insurance in 2025
Emerging D&O Risks That Demand Board-Level Attention
The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher’s permission. All rights reserved. ©2025 The Smarts Publishing. Tel. 877-762-7877. www.smartspublishing.com