2025 U.S. P&C Insurance Market Insights: Property Gains, Casualty Challenges

The 2025 Spring Market Update by Gallagher highlights a notable shift in the U.S. property and casualty (P&C) insurance market, revealing improved conditions in property insurance while the casualty sector remains under pressure. Property insurance, particularly for catastrophic risk placements, is witnessing declines in rates due to increased capacity from London markets, leading to competitive pricing dynamics.

However, casualty insurance continues to face challenges, with rate increases persisting in the range of 10-15%, especially for habitational risks thrust into the excess and surplus lines market. The disparity between single carrier placements and multi-carrier arrangements underscores the distinct market behaviors, with the latter seeing more stability in renewal terms. As companies adapt to rising deductibles and self-insured retentions, a shift toward innovative risk financing solutions is imperative.

Meanwhile, rising social inflation and the threat of high-cost litigation underscore the urgency for comprehensive risk management. Although difficulties persist for properties built pre-1985, emerging opportunities in builder’s risk insurance provide a silver lining as market conditions improve, suggesting a competitive landscape for new construction projects.