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
Despite escalating losses, many personal lines carriers persevered over these last tumultuous years. Because of corrective actions taken, insureds are experiencing a more stable outlook. An aggressive push for rate over the past couple years has led to improved underwriting performance in 2025. Focused on data-driven, results-oriented responses to a complex variety of macroeconomic factors, personal lines is no longer a stale segment of the insurance industry.
In 2024, the reinsurance market restabilized. This environment was a response to tightened capacity, improved performance, increased rates, etc. However, active hurricane and wildfire seasons may lead back to increasing reinsurance costs in 2025. It is expected that true reinsurance relief is still another year away.
Important buzz words for brokers and MGAs in 2025 include profitability, portfolio diversification, accountability, and complete submissions. Brokers are receiving hundreds of submissions each day. Retail agents can set themselves apart from the masses by submitting well-constructed narratives with supplemental applications, supporting data, and prior carrier loss runs. The extra effort made on the front end is making a difference for insureds in terms of turnaround time, eligibility, rate, and coverages.
COASTAL
The coastal property market is transitioning away from the hardening market of the past few years. Rates are flat but could see a decrease throughout 2025 as more competition enters the market. Some admitted markets are re-entering or loosening underwriting guidelines in hopes of writing more coastal business, which has not been the case in recent years.
After no major storms for the last 2 years in Louisiana, rates have softened 15% - 20%. Wind deductibles have decreased from 5% to 3%. Steady rates or slight decreases are occurring across the board in other states, such as South Carolina and Georgia. However, wind deductibles have increased in those states over the past couple of years and are holding steady as the rates slowly creep downward.
The coastal Florida wind deductibles are shifting down a bit, and 10% WH is becoming a thing of the past. Named Storm will come into play in many areas. Many accounts will require remarketing as the market softens, other solutions open up, and insureds remain price focused. In Florida, carrier stances on writing new business or staying on business fluctuate and nonrenewals are more common. Aggregate capacity is available for coastal counties; however, the price can be a barrier. Citizens has instituted a flood requirement on homes valued at approximately $750K or less and these policies can be costly. Admitted markets are re-entering this space along with substandard markets, with both often undercutting prices on the E&S side.
There are very few options available for older coastal homes (pre-1995) seeking wind storm coverage. Anything more than a ½ mile inland or not on a barrier island will have more options. Insureds can expect minimum 5% deductibles and 10% in some areas of Tri-County. A large domestic carrier recently reduced the requirement for wind coverage from 1 mile inland to ½ mile. There are restrictions in place and increased deductibles typically apply, but it’s a positive move from an underwriting and placement standpoint. Wind deductible buy back (WDBB) programs are helpful in reducing deductibles if required by a lender or property owner. Barrier island properties remain very challenging.
FLOOD
Flood insurance continues its streak as one of the most impactful insurance products across the country. Heading into 2025, the trends of 2023 and 2024 are expected to continue. Countless areas across the U.S. in non-traditional flood plains are experiencing not only tragic, but devastating losses from flash flooding (heavy rainfall) in isolated areas. Last year, flood losses were reported in all regions of the US. Because flood is not covered under a homeowner policy, there are millions of insureds left without this necessary coverage.
As cities and towns across the country continue the development of new buildings and homes, the impact from flooding is likely to grow. Although the number of flood insurance policies is increasing slightly overall, the number of flood insurance policies compared to homeowners policies remains substantially lopsided. Additionally, the percentage of homeowners who were carrying flood insurance in areas that have been impacted by the most recent flooding events over the past year remains at less than 10%. Overall pricing will see an uptick due to losses, but due to an increase of markets entering the flood insurance space, it will continue to create more competition as well as more opportunity in the private flood space.
Premiums can vary significantly depending on an individual property’s location and status. Along the coast, flood insurance will continue to be more expensive and repeat flood areas often see higher prices as underwriting continues to rate properties based on loss experience.
HIGH-VALUE HOMEOWNERS
Reinsurance rates are decreasing, leading to an increase in capacity and a lowering of rates. There are a few new players emerging in the high value market space, with preferred pricing for newer, wind mitigated risks. Homes over $10M remain harder to place, with fewer markets available.
Carriers who were hesitant to provide capacity in 2023 and/or 2024 are ready to play in 2025, resulting in less coparticipation on large property lines in 2025 compared to 2023 - 2024, which is good news for high value homes, especially those situated along the coast. Replacement cost and ITV are less of a concern in 2025 since most carriers have already taken corrective action over the last few years and also apply inflation percentage at renewal. Unlike past market cycles, terms are not wavering. Terms and conditions still remain relatively tight. More high-net-worth insureds are requesting the addition of cyber coverage with their policies in 2025 than have been previously seen. Higher AOP deductibles are still sticking. Policies with separate wind and/or water damage deductibles have also become the norm.
In Florida, the over $10M space will find markets are willing to provide larger limits. If the ceiling was previously $5M, it may now move up to $10M. Carriers are willing to provide more options on owner-occupied or rental properties, but vacant or Builders Risk properties are more challenging even with options of up to $20M - $30M in capacity from individual carriers. Anything newer than 1995 and with wind mitigation are more preferred risks with more coverage options available. In Florida, there will almost always be a water damage limit on policies, and the amount depends on the age and value of the home.
While rates are not yet dropping in the Northeast, they have plateaued, which still brings some relief following several years of rate increases on renewals. Northeast markets seem to be walking a fine line - trying to hold rate on renewals as long as the market will stand, but also pricing new business competitively enough to win the opportunity.
LONDON MARKET
The London outlook for 2025 is stable. The market is holding steady with reinsurance rates showing only minor fluctuation. More capacity is being deployed with a somewhat quiet wind season in 2024. For these reasons, in 2025, there will be more competition in the marketplace with a slight softening of the market expected along with a decrease in rates. Greater capacity is expected for newer homes, especially those with wind mitigation. This capacity will lead to a reduction in rates, but deductibles should hold steady. There will be a continued focus on cost per square foot. Updates to older homes will be evaluated closely to determine insurability. Liability for seasonal rental homes has become a big concern due to increased frequency and severity of claims by renters. Expect further changes in underwriting factors if liability trends continue as they are.
UMBRELLA
The downsized umbrella market of 2023 and 2024 is expected to remain. While umbrella coverage is widely sought, the options for coverage are limited. Nuclear verdicts and the increased costs of litigation have driven up the costs of personal umbrella policies. As a result, many carriers have exited the space completely. Insureds seeking excess limits are finding it more difficult to qualify and are increasing underlying limits to satisfy required minimum attachment points. As higher jury awards result in higher claim costs, companies must push premiums up to manage this dynamic or risk losing the ability to offer excess coverage altogether. New carriers have not entered the market and there is no sign of the current non-admitted markets increasing limits or expanding guidelines. The shrinking appetite includes many farm exposures. Unless current market capacity remains stable, more business will be looking for placement - especially in Western and Southern states where rural/farm markets have reduced capacity. Those with underlying farm exposures likely need to seek commercial or F&R solutions.
Of the remaining markets, $5M excess is typically the maximum available. Carriers are less interested in putting up large excess lines due to the litigious nature of U.S. personal umbrella business. Admitted carriers will offer larger limit excess policies, but only in conjunction with the insured’s homes, collections, auto, and watercraft, etc. Very few carriers are willing to write non-admitted personal umbrella business on a mono-line basis in the U.S. Very few primary markets are offering a primary $10M. The higher limits are no longer attainable. The lone bright spot for the E&S market is one market opening appetite to limits up to $10M. However, to qualify for this monoline excess product the risk must be clean. Rates are mostly steady for admitted risks; however the non-admitted rates are increasing with an emphasis on the harder risks.
Risks at the lower limits ($1M - $5M) with clean driving history are still able to obtain favorable terms. However, markets are scrutinizing youthful drivers, those with adverse MVR activity, and drivers over 70 years of age. In a few areas there are additional restrictions on age, driving record, and increased rates for homes over 6000 sq. ft.
WILDFIRE
Non-admitted carriers are expanding guidelines and increasing maximum TIV’s in this space to capitalize on the admitted carrier’s that are leaving these areas in record numbers. California has seen a record number of non-renewals from some of their largest admitted markets. This leaves a large hole in the market for high, mid, and low value homes flooding the nonadmitted market with opportunity. This should persist through 2025 as admitted carriers are cutting their market shares in high wildfire in all states and sending more non-renewals than ever seen on existing risks.
In light of recent wildfires, tightening is anticipated around Los Angeles and Southern California areas or homes considered to be at the edge of a community. The California FAIR plan likely cannot increase TIVs. This will force more insureds into the E&S market, and cause California rates to rise. It’s likely that the minimum rate in mid-2025 will hover around 45 cents in true suburban or metro areas. In more rural California areas insureds may see 57 - 60 cent rate. Other Western states have seen an opening of appetites. Edge of community and remote properties will still be challenging to place and require increased rates. Homes in wildfire areas that are protected, internal of community, and close to ski resorts will see more market interest. Some rate decreases or flat rates are being seen as more standard markets are re-entering the mountain business (low and high value) and broadening wildfire mapping restrictions.
VACANT PROPERTY
The outlook for 2025 is much more optimistic than it was a year ago. Overall, there continues to be a trajectory toward recovery in 2025. Pricing has become more stable, but the personal lines insurance marketplace still has a challenging landscape in almost every region of the country. Catastrophic weather events continue playing a big part in rate and eligibility guidelines, such as convective storms in the Midwest, hurricane activity in Florida, erratic temperature changes in the North, and wildfire regions in the West. Additional contributing factors that are keeping this market in a hard cycle longer than expected are supply chain disruptions, high repair costs, social inflation, excessive litigation, and climate change. The US is also experiencing a tricky sociopolitical environment. Generally, carriers are shifting the responsibility for greater risk mitigation onto insureds.
As of publication, anticipated interest rate changes have not yet occurred. As a result, properties are staying on the market for longer periods. In the South, there are several markets available, but properties are underwritten more closely with less overall limits such as liability, theft, and water damage sublimits. The market has made room for these risks, with some having no limit to the vacancy so long as the property is maintained properly. Builders Risks are more accepted across the board with mid-construction projects now considered with valid narratives.