Double-digit price rises are expected to be on the cards for many major business lines in 2025, according to a survey conducted by Alera Group, with public D&O expected to see both the biggest cost increases and decreases next year.
Rates
Amid peak activity for firm order terms and signings of 1.1 reinsurance renewals, strong reinsurer demand for property cat appears to be driving softening at the upper end of expectations, while recent tough talk on US casualty is not translating to meaningful reductions in ceding commissions.
Property reinsurance pricing is expected to decrease by 5-10 percent at the 1 January renewals, despite short-lived optimism that hurricanes Helene and Milton would reverse the forecast decline in rates, according to JMP Securities' Matthew Carletti.
KBW’s Meyer Shields has provided a “largely positive” outlook for specialty and standard commercial insurers, reflecting the historical pattern of peak commercial underwriting margins coming several years after peak pricing increases.
The cyber insurance market will see price decreases in the single digits, there will be increased attention on supply chain risks and physical threats from attackers “will likely only get more aggressive”, insurtech Coalition has forecast in its 2025 predictions.
After seven years of significant rate increases, the US commercial market will see flat to low single-digit increases in 2025, according to an outlook report from Woodruff Sawyer.
European cyber insurance rates are expected to continue to decrease into 2025, with a potential moderation in the second half of the year, Marsh’s Macarena Bandres has predicted.
New US casualty market entrants are leading to rate stabilisation in excess of $10mn, while the London market is “becoming a bit more aggressive” than domestic carriers, according to Risk Placement Services.
WTW has reported that US commercial insurance rates increased by 6.1 percent during the third quarter of 2024, a slight sequential acceleration from the 5.9 percent increase in Q2.
Real estate and hospitality shared and layered (S&L) property programs are benefiting from rate decreases at renewal that in some cases are reaching double digits, while single carrier placements continue to face pricing pressure with increases that could hit mid-single digits.
Global D&O pricing has continued to soften throughout 2024, Allianz Commercial has said, with London market wholesale carriers pushing up competition in overseas markets.
Premium renewal rate rises in commercial auto, business owners policy (BOP) and umbrella all accelerated in November from the previous month, according to the latest data from Ivans.
Wholesale giant Amwins expects the US property market to continue to soften despite Hurricanes Helene and Milton, while rates remain softer on the East Coast as well as for insureds with large total insurable value (TIV) overall.
Professional indemnity is now a buyer’s market with increasing capacity having driven an ever more competitive rating environment, according to Clyde & Co.
The struggles in California’s beleaguered property insurance market have been laid bare by new figures from the Golden State’s Fair Plan, which show that its assumed exposure soared by 61.3 percent in the 12 months to 30 September 2024 to $458.1bn.
