Want to know more about what to expect in the insurance marketplace but don’t have time to read a 10+ page State of the Market? Interested in emerging trends and market or capacity changes? Gain the key marketplace insights you need at just a glance with our easy-to-read 2025 guides.
KEY MARKETPLACE ISSUES:
A confluence of key issues drove a difficult and, at times, unpredictable casualty market in 2024. Claims costs continued to rise for both primary and excess liability. Inflation (both economic and social) reached historic highs. Third-party litigation funding (TPLF) continued to influence growing nuclear verdicts. In 2025, casualty carriers are pursuing growth and capitalizing on increased business flow to the surplus lines market. Limit deployment is expected to remain low. Rates and retentions may rise, and a new round of carriers are likely to remediate.
Underwriting operating models and technology remain a focus, as does the war for talent, putting a potential strain on expenses. Underwriters routinely report a high submission volume, so complete and thorough submissions are required to ensure priority review.
Primary premiums are on the rise. Last year, rates were reported in the mid-single digits, but rates continue to increase due to the claims expense and settlement pressures. More scrutiny is expected on large and open claims, and excess carriers are likely to ask more questions regarding underlying loss experience. Excess liability rate has been difficult to predict. While the average increases were in the mid-teens in 2024, complex and challenging accounts saw increases well above 20%, particularly where lead market capacity was limited, fleets were underpriced in prior years, and/or adverse claims development coupled with exposure and inflation growth put pressure on actuarial models. New entrant capacity and excess facilities, such as CRC’s e3 side car product, allow excess towers to be restructured into quota shares that can temper sharp relativity changes up the tower.
CANNABIS
States continue to legalize both medical and recreational cannabis. Most recently, Virginia, Minnesota, Missouri, and Ohio have legalized recreational cannabis. In some states, sales have either just begun or will begin later this year. These frequent legal status changes indicate that staying updated with current laws and regulations in the states you write business in is essential.
Two different marketplaces are operating across the country - Hemp Derived Products vs. Medical & Recreational THC. Some states have enacted laws to crack down on some of the more unregulated hemp-derived THC products. Still, there are some states, like Minnesota, that have enacted balanced regulations around hemp-derived products rather than banning them entirely. There are also many states on either end of the spectrum. The most important takeaway from the observation of the two different marketplaces is that businesses are entering the hemp-derived THC space, which could create coverage gaps. For example, there has been an increase in beverage distributors taking on the distribution of hemp-derived THC beverages. Additionally, large retailers continue to add these products to their shelves, creating potential coverage issues.
Many current losses are heavily property-driven. As the space continues to evolve, more states come online, and rates come down on the casualty side, it is a time for retailers and insureds to evaluate coverage. In the legalized recreational and medical THC market, increased product recalls in states like California are affecting large, well-known operators. Product recall is often overlooked but can be extremely important as oversight increases.
The casualty side has seen increased capacity and rate stabilization as more carriers take on these risks or entertain certain pieces of the cannabis industry. However, increased capacity can also create confusion for clients, as this marketplace has many MGUs, wholesale programs, and carriers. CRC brokers create value by leveraging a more comprehensive view of the cannabis marketplace to direct agents to the best solution for their clients’ needs. Pricing depends mainly on the property and individual account loss history because claims often involve theft, fire, and loss of crops.
COMMERCIAL AUTO
Commercial auto continues to be a significantly hard market due to carrier profitability issues stemming from increased frequency and severity of claims. In 2024, many standard markets non-renewed monoline and packaged auto accounts causing a significant uptick of submissions into the wholesale channel. States with tough litigation environments, such as Florida, Georgia, and California, saw steep increases in premiums as a result, and the New York primary auto market continues to shrink in availability.
A qualified driver shortage remains in effect, resulting in businesses lowering standards to attract and retain employees. Carriers have cited this trend as causing higher accident rates and resulting claims. Auto accidents can lead to fatalities and severe bodily injury. Plaintiff demands may include high demands for non-economic or punitive damages, and often, nuclear verdict cases involve auto or truck accidents. Finally, auto physical damage costs continue to rise, putting additional pressure on pricing. Hired and Non-Owned Auto (HNOA) coverage is often required but more challenging to secure if it does not fit the primary auto policy well. Occasionally, a solution cannot be found. However, standalone options, such as CRC’s HNOA product, can potentially help.
Excess auto cuts across individual industry segments; however, stand-alone buffer and excess auto options are frequently requested, particularly for large and/or loss-driven fleets. An influx of freight broker/freight forwarder accounts is entering the wholesale market despite a lack of capacity, and market exits for towing accounts are proving challenging.
CONSTRUCTION
The construction market is difficult to summarize as it varies significantly by class, account size, fleet composition, and geographical location. Furthermore, project and wrap policies require specialized underwriting, and market capacity is driven by program structure, such as wrap-up or non-wrap coverage, project term length, type, and the experience of the contractor and/or the owner. Commercial contractors and projects still enjoy a more competitive environment than residential ones where restrictive or limited coverage may be at play, mainly where work includes condos and large track homes. Premises losses for bodily injury and third-party property damage during construction have increased in recent years. A recent scaffolding collapse resulted in one of the largest nuclear verdicts of this year. Tough commercial and industrial accounts driven by frequency or severity should expect higher rate increases as well as any risk with a large contractor fleet. Unit rates are increasing across the industry, and buffer layers are often required to tap into preferred lead capacity. Structured solutions and multi-year aggregated policy requests similar to those in trucking are on the rise.
The Florida market has contracted significantly for residential building due to coastal soil conditions, ongoing construction defect issues, and higher demands on premises losses. South Carolina is on watch due to indemnity clause applicability and unique laws that negate the statute of repose. Wildfire capacity is available; however, the high rate-on-line approach often does not fit smaller risks. On the positive side, risks are being properly underwritten and differentiated versus the black-and-white approach of prior years.
The economy has a substantial impact on construction growth and the insurance market. With inflation abating and potential tax cuts on the horizon, there was an assumption that construction activity would be strong in 2025 and beyond. However, the threat of new tariffs and potential economic slowdown could put lenders and developers in a wait-and-see mode again. Any inflationary increase in materials could also send actuaries running to re-trend loss costs based on replacement values.
ENERGY + MARINE
In 2025, casualty placements for commercial marine will likely behave more moderately compared to 2024. Commercial marine continues to present challenges in higher hazard classes (e.g., line haul towing, dredging, and marine construction). Clean, well-priced accounts will continue to see single-digit rate increase requests, although some could see flat renewals dependent on exposure. Underwriters continue to work through their portfolios, and some carriers will continue to shed unprofitable business.
Regarding energy, market capacity tightening in 2023 was also seen throughout the first half of 2024, with many carriers pulling back limits and increasing prices. Premiums have leveled out on many primary placements but continue to offer increases on the umbrella/excess. Increases are expected in the lead umbrella space on accounts with a large fleet. However, most carriers in this segment experienced a profitable 2024, and there is still competition for desirable accounts.
Underwriting scrutiny continues to be applied to the transportation/auto component of lease operator and oilfield services accounts due to nuclear verdicts in the auto liability space. Certain areas of the country, such as Louisiana and South Texas, are proving to be more problematic. Likewise, underwriters are carefully reviewing the insured’s contract management practices as action-over claims and verdicts more frequently impact the umbrella layer.
Energy accounts with clean loss records, best practices in place for contract management, and positive relationships with underwriting should experience favorable results in the marketplace. The importance of a transparent relationship between the insured and the underwriter cannot be overstated. Oilfield services clients with adverse claims histories and a large fleet should begin the renewal process early to allow time for underwriting meetings and, if necessary, procurement of alternative options. As always, insureds should be encouraged, when meeting with underwriters, to differentiate their risk from others and highlight proactive risk management practices.
HOSPITALITY - RESTAURANTS + BARS
Price, terms, and conditions vary depending on the venue, which is often the most critical factor other than loss history. When it comes to the primary, 2025 will look much like 2024. There continues to be a lack of liquor liability markets in some states, including West Virginia, Iowa, South Carolina, and Alabama. If writing challenging venues, rates and retentions are increasing rapidly as nuclear verdicts continue to impact the space. Bars with more than 50% of total sales from liquor receipts are more challenging than the traditional restaurant space.
Increased assault and battery (A&B) claims and inflated verdicts/settlements have markets attaching A&B exclusions, limitations, and sublimits, even on clean accounts - especially if they are liquor-driven. While there is no shortage of markets that can entertain the class, excess capacity is thinning out and driving up rate and attachment points.
HOSPITALITY - HOTELS + MOTELS
Business continues to flow into the E&S marketplace due to A&B and human trafficking claims. 2025 will look much like 2024 for primary coverage. While risk-purchasing groups (RPGs) were heavy in hotels and motels, many are no longer available. The reduced RPGs available that are willing to quote the business substantially increase excess costs. Many RPGs also require a buffer as they do not want to attach unless in excess of $2M - $5M in limits; however, this can vary by venue. It is difficult to find carriers in states with challenging liquor liability laws, such as South Carolina.
ENVIRONMENTAL
Market capacity increased in 2024, and pricing should remain stable for most products in 2025. The market includes large, experienced carriers and numerous startup MGAs. However, there is a wide variance in coverages and carrier appetites. Specific sectors and coverage lines are experiencing price and coverage shifts. Site Pollution pricing and coverages should remain stable for most exposures. Still, they may continue to harden for hospitality, residential (i.e., condo, single-family, townhomes), and specific multi-family exposures, primarily due to mold losses. Deductibles remain stable after a push for increases in mold coverage, but coverage is still readily available.
Contractor Pollution Liability (CPL) and combined-form CPL/Professional products are fast-growing, and competitive pricing options are available. It is not uncommon for traditional CPL purchasers to transition to a combined-form CPL/Professional at renewal or mid-term due to contractual requirements and rising understanding of the Contractor’s Professional exposures. Combined-form GL/Pollution remains competitive, but the market is typically seeing single-digit rate increases. The number of carriers offering companion Auto and Workers’ Compensation has been stable. PFAS is still a hot topic, and most carriers are adding PFAS exclusions to new business and renewals. Depending on the risk, some carriers will underwrite the exposure and carve back the exclusion.
PRODUCT RECALL + CONTAMINATION
Pricing and terms continue to be competitive as the market remains soft. Capacity is still abundant; however, a few select carriers will reduce capacity on higher-line placements, which could indicate a slow hardening of the market. The marketplace includes a mix of more prominent, experienced carriers and newer MGA and carrier players. Lloyds remains a key factor as well. The need or desire for contamination and product recall coverage has continued to rise. Claims continued to plague the market in 2024 with extensive recalls on food and non-food accounts. The regulatory landscape continues to evolve, and with a new administration, it will be essential to watch this area closely. Regulations can lead to more testing and oversight, increasing the number of positive events caught and reported. Conversely, a pullback in regulation could mean a lack of quality control and management, leading to more incidents.
PRODUCTS LIABILITY
Apart from a few historically challenging products, such as hoverboards and electric scooters, the product liability market has begun to soften. It is a class of business that many carriers are targeting, which is increasing competition. Newer carriers that entered the marketplace in 2023 and 2024 have helped to provide capacity and stabilize pricing. The more significant price increases in prior years are no longer the norm. Most accounts are seeing only small increases, and in some business categories, growing accounts are seeing flat renewals. Overall, terms and conditions have stabilized.
The exception to the softening are large complex risks with major consumer exposures resulting in severe bodily injury and or class action suits. Critical auto, recreational over-the-road vehicles, food, chemicals, and truck trailers have all seen recent nuclear verdicts and settlements. Due to reinsurance treaty restrictions, PFAS exclusions have become the norm for E&S markets.
PUBLIC ENTITY + EDUCATION
The public entity and higher education market is currently experiencing a transitional phase. While loss trends driven by increased claim severity continue, additional capacity entering the market and competing for business has helped to mitigate overall pricing increases. Clean accounts (i.e., good historical loss ratios and located outside challenging states, including California, Washington, Oregon, Louisiana, New Mexico, or Colorado) are seeing rate increases of 0% - 7%. The need to replace capacity is no longer as acute as in prior years. However, in cases where capacity needs to be replaced for distressed business, the market remains challenging. Insureds with a worse-than-average loss experience, or those in difficult jurisdictions, continue to contend with higher attachments, deductibles, and SIRs, more restrictive coverage, or less overall limit - even in cases where incumbents are willing to offer renewal terms.
Relativity in pricing layers continues to decrease slowly, although it may stabilize again as we continue to see an increased frequency of severe claims. Line sizes also remain stable, with most carriers limiting their per-risk capacity to $5M or lower in distressed situations. Most carriers have adequately staffed to accommodate the rise in submission flow, which increases the likelihood of generating competition and is helping to slow price increases. The capacity that entered the market in 2024 and prior years is growing as a percentage of the market, and additional capacity is expected to come online later in 2025. The appetite associated with this new capacity varies significantly, and total capacity remains below what was available in the marketplace in 2020 and 2021. There is still heightened scrutiny around sexual abuse/harassment, state-specific revival laws for victims of sexual abuse, law enforcement, correctional facilities, state-specific weakening of tort caps relative to law enforcement, social inflation, traumatic brain injury/chronic traumatic encephalopathy/concussions, and crime scores.
REAL ESTATE - HABITATIONAL
GL and the lead $5M markets remain limited. Minor risks are increasingly unable to secure clean terms at any price. Building a clean lead of $5M is difficult and expensive. The number of carriers interested in the excess layers have increased because most deals have restrictive terms in the GL or lead $5M. In 2025, rates will likely increase 5%-10% for GL and excess unless there is a carrier change. Premiums will depend primarily on location and what the insured’s operations include (i.e., market-rate housing, section 8 or 42, student housing, etc.). Crime scores are also scrutinized. California habitability remains a problem that no one has solved yet.
New requirements for terms from Freddie Mac will impact virtually every buyer and drive premium increases. These updated guidelines state that Freddie Mac will not accept any GL or umbrella/excess liability policy with sublimits or that excludes any of the following coverages: Assault and Battery, Firearms, Animal Attacks, or Molestation.
Georgia has become a challenging venue for GL. The state’s governor is pursuing comprehensive tort reform legislation to curb the impacts of legal system abuse by controlling frivolous lawsuits and massive jury verdicts that make it challenging for Georgia consumers and businesses to afford insurance premiums. A positive marketplace response would be anticipated if the legislation were to pass.
LIFE SCIENCES
The Life Science market remains soft primarily due to new capacity, new carriers, and increased appetite for many existing carriers. As of early 2025, several markets are launching excess capacity (with limited distribution), which will only drive more competitive rates for well-performing accounts. Despite the increased competition and flat/decreased rates that may be expected in this space, several higher-risk classes continue to demand creative coverage solutions such as opioids, contraceptives, hormone therapy, IVC filters, and, finally, GLP-1/semaglutide (weight-loss) products.
TRUCKING - PRIMARY
Although substantial capacity entered the marketplace with insurtechs and programs in 2024, virtually all have tightened due to rising reinsurance costs. The industry continues to expand the adoption of fleet technology, specifically telematics. Motor carriers embracing telematics are seeing more operational efficiencies and better insurance pricing due to greater competition for those accounts. Motor carriers are looking to save money wherever possible, and insurance costs are a substantial portion of their overhead expenses. Many insurance companies offer discounts or subsidies via various telematics providers, which can help offset costs. Clean accounts may come in flat or see slight increases. However, challenged accounts will see more significant increases based on account specifics and location.
TRUCKING - EXCESS
The 2025 marketplace will resemble 2024 but with further capacity cuts. Several carriers are reducing lines to $5M or less until attaching in excess of $10M. Carriers have cut capacity from $5M to $2.5M on more significant fleet accounts. In addition, more carriers are considering where the trucks are traveling rather than where they are domiciled due to claims concerns. Excess rates for truckers continue to increase as capacity decreases. The lack of capacity has expanded the need for swing plans and aggregated auto deals at higher attachments.
In the Southeast, the excess trucking market is firm. Texas, in particular, has become even more difficult due to carriers exiting the state altogether or pulling limits back from $2M to $1M or even $5M to $1M. Excess oilfield trucking faces challenges as oilfield activity increases and more trucks are on the road, leading to additional losses. Local jurisdictions have seen a spike in large verdicts as the pressure of social inflation grows. Larger verdicts continue to emerge, and carriers respond with higher rates and lower limits.
Rates in the worst venues are increasing more rapidly, and the list of challenging venues continues to grow as more settlements and verdicts are finalized. In addition, actuaries are having difficulty evaluating recent loss trends because of COVID-19 delays. The 2015-2019 accident years are significantly worse than previously believed, partly due to the backlog of court cases from pandemic closures in 2020-2021. As a result, carriers have realized their rates were inadequate for excess auto as loss results continue to deteriorate. Reinsurance rates and availability also continue to be a struggle in the class. They are a significant factor in rate increases and capacity decreases as more reinsurance markets exit excess auto. Telematics remain important and are now often expected as underwriters want to understand how trucking firms utilize telematics data collected.