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.
GENERAL OUTLOOK
The healthcare sector continues to experience significant M&A activity, fueled by rising bankruptcies and increased private equity involvement. These trends are reshaping the market, creating both challenges and opportunities across various segments. Increased competition, shifting regulatory pressures, evolving risk profiles, and fluctuating capacity are driving changes in pricing and underwriting strategies. While some areas face ongoing rate pressures due to claims severity and economic factors, new market entrants and excess capacity in certain lines foster competition. As the marketplace changes, navigating these dynamics will require strategic partnerships, proactive risk management, and adaptability to emerging trends.
LONG TERM CARE/SENIOR LIVING
The Long-Term Care (LTC) and Senior Living insurance marketplace will continue to face significant challenges in 2025, driven by economic pressures, evolving demographics, and increasing claims severity.
Ongoing mergers and acquisitions are reshaping the landscape, with larger operators acquiring regional senior living homes. Private equity remains heavily involved in assisted living and memory care, driving a perceived “profits over people” dynamic, which puts pressure on rates. This has sometimes led to adverse underwriting experiences due to the inconsistent performance of entities as they are bought and sold.
High interest rates, inflation, and elevated costs of staffing and supplies are pressuring smaller providers. Many are seeking partnerships with larger systems to benefit from economies of scale. Additionally, the lending environment remains challenging for new developments. However, an increase in new builds is anticipated based on macroeconomic conditions likely to drive more funding into the private equity markets. The regulatory climate is still changing, and there will be an intense focus on the effectiveness of regulations. From a rate standpoint, everything is still demographic-driven. Still, there is substantial competition from newer markets trying to buy up business. This is creating inconsistencies in the marketplace.
Claims frequency and severity, particularly in memory care, have returned to or exceeded pre-pandemic levels. The industry is experiencing more nuclear verdicts and high plaintiff awards, placing pressure on carriers to adjust rates accordingly. Some business is flowing back into the direct marketplace as the E&S carriers are holding firm on the necessary rates based on the claim activity in this sector.
Capacity on the excess side remains unpredictable, with no carrier consistently offering significant limits. Established carriers are cautious and often unwilling to provide excess coverage above their primary limits. Newer market entrants are increasing competition, but their staying power is uncertain, raising concerns about long-term claim payment reliability. Renewal retention will require balancing cost considerations against carrier stability.
The rapidly expanding senior population drives increased demand for housing and care solutions, including a shift toward home-based care and wellness-focused living. Technology plays a pivotal role, with the increased adoption of telehealth, smart sensors, wearable devices, and updated emergency care systems. Consumers also demand more personalized care options and tech integrations in senior living facilities. There is a growing emphasis on community-based living with a wellness-centric approach and social engagement opportunities. The active adult segment is evolving to appeal to a new generation of seniors seeking a personalized and vibrant lifestyle.
As the senior living industry garners more attention from lawmakers, the press, and the public, the regulatory environment becomes more complex. The focus is on improving oversight and effectiveness. Recruiting and retaining qualified staff remains critical, with elevated costs and ongoing shortages adding to operational challenges.
Despite the above-mentioned challenges, most venues still see new market entrants and increased competition. While that should plateau to some degree in 2025, the increased competition should work to hold rates down for most buyers. It is unclear how long the competition can and will work to offset the pressures on the market caused by increased claims, M&A activity, and other factors discussed above.
HUMAN SERVICES
Challenges in placing these risks will persist in the year ahead, and capacity and affordability will likely worsen. These accounts are entering their fourth year of change from the standard market, which began gradually and intensified in 2023 and again in 2024.
Risks that have not seen changes from the standard market should expect disruption in the year ahead, mainly as package offerings (including property & auto) and occurrence-form PL become increasingly rare. The focus on abuse coverage is justified as carrier claims rose in 2024, and “revivor statutes” have opened the door in certain states to file claims beyond the regular statute of limitations, causing intense scrutiny for underwriters and reinsurers. From a class perspective, inpatient care organizations are bracing for premium increases and higher retention.
Overall capacity, abuse coverage, and auto in the umbrella continue to be difficult, and significant cost increases are expected. More interest from legacy allied medical carriers in writing excess/umbrella coverage does provide more competition. Yet, deployed capacity on any one account remains low, generally in the $2M - $5M range per account. As a result, it takes more carriers to build capacity to reach levels of $5M - $15M. A thorough review of contractual requirements is helpful to assess how much limit is truly required of the insured or on balance with their peers.
Smaller social and human services organizations are arguably those struggling the most as they don’t have the funding to keep up with minimum premiums. Foster care and adoption organizations have also taken a significant hit. There is an increased number of E&S carriers willing to consider care-related organizations. Still, where they are more social service oriented, issues arise as it often becomes a GL-driven risk. Quality submissions are still critical, as underwriters are unwilling to underwrite those who are not knowledgeable in the space and cannot articulate the risk. It is critical to help underwriters become comfortable with all services being provided. Service changes with these risks happen frequently as insurance and state/city contracts influence what services are provided. It’s also important to focus on employing carriers willing to cover most (if not all exposures) so that if an insured adds a residential location, the carrier can extend coverage for inpatient care to avoid moving mid-term or after one year in the E&S marketplace.
Retail agents are advised to begin 90 days from expiration to secure the marketplace. Wholesale brokers open access to traditional allied medical carriers that may also consider a risk, thereby reaching a broader marketplace for context in delivering what can be a very uncomfortable renewal proposal.
PHYSICIANS
For locum tenens, a limited number of carriers can provide coverage to satisfy all the requirements of national locum groups on a single policy (whether state or contract-specific). States like Pennsylvania, for example, are increasingly difficult because they require separate limits due to a PCF and have experienced legal changes in the last few years that have caused carriers to be extra cautious about writing in that state. Few carriers will provide separate limits when required by the state or sometimes contract. A larger pool of carriers will review shared limit physician staffing/locums. For submissions, locums should still provide a breakout of days or hours broken down by specialty and state. This helps the carrier better understand the risk and allows the carrier to obtain the best price for the insured versus rating on a different metric (such as revenues or people). Having credentialing protocols in place and a risk management program helps underwriting become more comfortable with a risk.
The Physicians’ insurance market is experiencing significant shifts as solo practitioners and smaller physician groups increasingly turn to the E&S market. Rate adjustments by standard markets may be driving this movement, but it remains to be seen if those adjustments will be enough to continue pushing more business to E&S even as losses creep up.
The E&S market has seen no new entrants, but some sidelined carriers are becoming more aggressive with new business. This has resulted in greater pricing variability, with some accounts experiencing massive outlier pricing. Renewals are inconsistent, with many accounts coming in flat or seeing slight reductions while others face rate increases or unexpected changes in terms. Carriers are balancing aggressive underwriting for new business, focusing on obtaining rate and step increases on renewals.
Long-tail and severity-driven classes like obstetrics, pediatrics, and major surgical specialties like neurosurgery are seeing less aggressive competition. Traditionally challenging venues like Cook County (Chicago, IL), West Virginia, and New Mexico remain difficult. Georgia is emerging as a problematic venue as well. The surplus lines market for physicians continues to create sound solutions for multi-state and telemedicine risks.
As physicians seek lower premiums, carriers introduce options with mitigated terms, split limits, or reduced coverage triggers. It’s critical to clearly communicate these changes to insureds to ensure transparency and avoid misunderstandings.
Private equity is driving changes within physician groups, with new c-suite leadership often seeking better carrier partnerships and exploring the market for the first time in years. Senior physicians are retiring, leading to increased turnover and new board members aiming to reassess coverage strategies.
The market is marked by variability. Retail agents must proactively communicate with underwriters and insureds to navigate evolving carrier strategies, protect renewals, and manage client expectations. As losses continue to affect the space, maintaining transparency and offering tailored solutions will be key to success in 2025.
MISCELLANEOUS MEDICAL
The staffing industry has experienced a significant decrease in the overall revenues/exposures of the operations compared to the demand the marketplace saw just 2-3 years ago. That said, however, claims activity increased quite a bit in 2024 with more high-value verdicts. Since many of these matters have a longer tail, claims activity will continue to trend upward.
The Miscellaneous Medical segment is marked by abundant capacity and shifting dynamics as certain categories, such as staffing risks (including locum tenens) and pharmacies/compounding pharmacies, increasingly move to the wholesale market.
E&S arms of standard companies remain dominant due to their ability to provide necessary limits and broader geographical reach. Business continues to flow into the E&S market as carriers tighten underwriting to manage losses.
Capacity in this segment is abundant, but there are significant swings in pricing. Renewals are seeing moderate rate increases, while new business is underpriced. Good accounts are seeing plenty of competition. Accounts may require marketing to obtain reductions, but reductions are sometimes possible. Agents must be prepared to manage client expectations around rate fluctuations. Some categories are transitioning to wholesale-only markets. Retail agents should collaborate with wholesalers that offer robust market access and expertise and the ability to handle mid-term service needs.
Nuclear verdicts are driving increased demand for higher limits and excess coverage. Additionally, some pockets of business are emerging from artificially low-priced programs, resulting in substantial price increases. Transparent communication with insureds about these changes is crucial. Increased underwriting attention is also paid to healthcare umbrellas with significant underlying auto exposure. Emphasis on underwriting sexual abuse, especially on the excess, also continues.
The rise of individual physicians offering aesthetic procedures due to reimbursement pressures presents unique risks. These exposures are often inadequately addressed in traditional applications, and coverage may sometimes not exist. E&S continues to see significant GLP-1/semaglutide risks as the weight loss product use trend grows. Underwriters are underwriting these very carefully.
The Miscellaneous Medical market in 2025 presents opportunities for agents to deliver tailored solutions by leveraging wholesaler partnerships. Retail agents must focus on educating insureds about rate changes, coverage shifts, and evolving exposures to navigate the dynamic landscape effectively.
HOSPITALS
Obtaining significant excess limits is very difficult in the hospital space. The marketplace looks much like it did in 2024 when underwriters were obtaining higher rates and more restrictive terms while large health systems continued to report claims alleging a physician’s sexual misconduct. Unlike older cases where abuse spanned over decades, these perpetrators are being identified within 5-10 years of their initial abuse. Despite the shorter timelines, the recent cases are settling for 9-figure amounts (often whatever the total amount of limits available is). The volatility of sexual misconduct cases will drive renewal discussions for most of the 100 largest hospitals/health systems. There is also continued emphasis from underwriting on evaluating insured finances for the ability to meet self-insured retention obligations.
In 2024, the hospital market saw one carrier leave and another non-renew most of its hospital business. The financial burden on rural hospitals makes it difficult for them to retain risk. Due to their low attachment, primary placements have made it difficult for the E&S marketplace to underwrite. The most prominent writers of small hospitals continue to be the admitted insurers in the Medical Professional Liability Association (MPLA).
Hospital liability will have a laundry list of variables impacting the severity/frequency of claims: practitioner burnout, an aging workforce, and the growing roles of artificial intelligence and private equity. This industry sector will continue to have challenges in 2025, including premium rate changes in the 5% - 15% range.
CORRECTIONAL CARE
The marketplace for correctional care is much as it was in 2024. Correctional care coverage options remain very limited. Few markets are available for risks with more than 50% exposure to correctional care. More markets will open up if the exposure is around 15% or less. A high threshold of information is needed to write risks, whether individual or small groups.
CYBER
2025 will look much like 2024. Cyber rates have predominately stabilized for most insureds as capacity re-entered the market over 2023 and 2024. While the healthcare sector remains one of the more difficult classes for cyber insurers, the increased capacity has worked to curb the rate increases seen in prior years. Buyers with a clean claim history and proper security controls consistently see flat rate renewals and even rate reductions where warranted. While premiums aren’t likely to drop significantly in 2025, a stable marketplace with cyber insurance readily available for most buyers in the healthcare sector is anticipated. However, rates may start to tick up in 2025 due to claim activity.
LIFE SCIENCES
The Life Science market remains soft due primarily to new capacity/carriers and increased appetite for many. As of the beginning of 2025, several carriers are launching excess capacity (with limited distribution), which will only drive more competitive rates for well-performing business. 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.