Commercial property and casualty insurance premiums have seen a notable shift in the first quarter of 2025, according to a recent survey by The Council of Insurance Agents & Brokers (CIAB). Premiums across all account sizes rose by 4.2%, which is a significant decrease from the 22% increase observed in the previous quarter. This marks the 30th consecutive quarter of rising premiums, but the trend appears to be softening.
Medium-sized accounts experienced a slower increase, averaging just 3.6% in Q1 2025, down from 6.4% in the last quarter of 2024. This slowdown reflects a more competitive market, with more insurance carriers entering the middle market. Insurers are showing greater flexibility, allowing accounts to be adjusted to fit better within underwriting guidelines. Respondents noted that many carriers were willing to renew policies with little to no increase for what they considered “good risks.”
In terms of specific lines of business, cyber insurance premiums led the way with a decrease of 2.1%. Directors and Officers (D&O) liability premiums fell by 1.7%, while employment practices liability saw a slight drop of 0.4%. On the other hand, commercial auto insurance experienced the largest increase, with premiums rising by 10.4%, up from 8.9% in the previous quarter. Commercial property premiums, however, saw a slowdown, increasing by only 2.9%, which is a stark drop from the 6% increase in Q4 2024.
The CIAB survey also highlighted the ongoing rise in umbrella insurance premiums, which have increased by 9.5% over the past year. This trend is attributed in part to the influence of third-party litigation funding, which has affected claims and the overall availability of coverage. One survey respondent pointed out that “nuclear verdicts,” or very high jury awards, are pushing liability and excess rates higher. These verdicts can exhaust all levels of insurance limits, impacting the entire claims process.
Overall, the data suggests that while premiums are still increasing, the pace of growth is slowing, indicating a shift toward more favorable conditions for buyers in the commercial insurance market.