Commercial insurance buyers can expect flat to low single-digit premium increases across many lines of coverage in 2025, as rates continue to trend down in a more competitive market, Woodruff Sawyer & Co. said Thursday in a report.
Directors and officers liability, cyber and property, which saw some of the largest rate hikes in the hard market that began in 2018, are seeing rates stabilize as insurers adjust to improved financial conditions, the report said.
“We expect premiums to stabilize or rise modestly, varying by line of business and industry. Increased market competition has gradually tempered rate growth, and while hurricanes Helene and Milton were devastating, their insurance losses were lower than anticipated,” the San Francisco-based brokerage said in its annual P&C Looking Ahead Guide.
Property insurance rates will continue to soften with flat to 10% decreases likely next year as insurers expand capacity, but liability claims costs will likely remain challenging for casualty lines, the report said.
Despite long-term rate increases, commercial auto coverage continues to cause underwriting losses for insurers, and rates will likely rise by 7% to 12% next year, the report said.
Increased attorney involvement is also driving up claims costs in commercial general liability and rates are expected to rise 4% to 9% next year, Woodruff Sawyer said.
In excess liability lines, umbrella layers continue to generate multimillion-dollar losses for insurers, so rates will likely increase 8% to 15% for large companies, and 6% to 12% for small and mid-sized companies.
In higher excess layers, new capacity is driving increased competition and more moderate rate increases. Excess rates will likely increase 6% to 12% for large companies and 4% to 10% for small and mid-market companies.
Workers compensation continues to deliver the best underwriting results of any major line of insurance, so rates will likely be in the range of down 4% to 1% increases, the report said.
