2025 Property and Casualty Insurance Market Trends: Insights from USI

According to a recent analysis by USI Insurance Services, property insurance markets are projected to decline by up to 20% in 2025, while casualty markets might remain stable or see modest increases. For properties not exposed to catastrophic risks and with minimal loss histories, premium rates could stay steady or decrease by up to 10%. Properties with catastrophe exposure might experience rate reductions ranging from 5% to 20%, signaling a competitive insurance landscape.

Properties with unfavorable loss records, whether exposed to catastrophe risks or not, are anticipated to encounter rate changes varying from a 15% reduction to a 5% increase. USI attributes these developments to fewer than expected losses in 2025, increased capacity, and favorable treaty renewals. These factors suggest continued competitive conditions in the property insurance market through the first half of 2026, impacting underwriting strategies.

Casualty Markets and Auto Insurance Trends

In the casualty sector, primary general and product liability insurance is predicted to maintain rate stability or increase by up to 12.5%. The auto insurance market remains complex, particularly for fleets with fewer than 200 vehicles and favorable loss records, where premium rates could remain flat or rise as much as 12.5%. Conversely, those with poor loss histories might face rate hikes between 20% and 40%. Larger fleets, consisting of more than 200 vehicles, may see increases from 5% to 20%, reflecting ongoing regulatory compliance challenges.

USI noted, “The second half of 2025 observed ongoing stabilization across most casualty lines, with adequate capacity and generally moderated rate increases for well-managed risks.” However, the persistence of social inflation continues to escalate claim costs, notably impacting automobile liability lines and risk management practices.

Trends in Umbrella and D&O Insurance

In other sectors, mid-sized market umbrella and excess liability coverage are predicted to remain unchanged or increase by up to 15%. Larger accounts might experience increases up to 20%. Directors and officers (D&O) insurance for public companies is anticipated to remain flat or increase by 7.5%, while coverage for private companies and non-profit organizations is projected to stay stable or grow by 5%, driven by evolving regulatory compliance requirements.

USI's findings provide valuable insights into the evolving landscape of insurance markets, emphasizing the importance for industry stakeholders, including carriers and providers, to monitor these trends closely to adapt their strategies accordingly. This analysis underscores the need for effective risk management and compliance strategies in navigating these market changes.