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.
BUILDERS RISK
Domestically and abroad, specifically in London, capacity remains ample in the Builders Risk sector, a contrast to what was observed in recent years. The multi-family construction boom has leveled off in some parts of the country following a post- COVID surge, which has increased competition for projects. For coastal and non-coastal risks, frame capacity is abundant as a few new market entrants have spurred an increase in capacity, putting pressure on rates and increased line size with terms and conditions also improving. Single peril carveouts are less likely to be required, and deductible buybacks are easily accomplished. However, high-hazard flood exposures can remain challenging as some of the traditional MGAs are unwilling or unable to provide coverage.
FRAME NON-CAT
The market continues to be healthy, with capacity from MGAs increasing their treaty holdings. New entrants into the marketplace are offering fresh capacity. Frame non-CAT Builders Risk rates continue to decline, and the market is agreeable to reducing water damage deductibles. In summary, terms, conditions, and deductibles are improving.
With MGAs having more capacity, smaller projects ($30M and below) can be placed with one market versus 2-6 markets in previous years, driving down pricing and improving terms and conditions. Depending on the region, there are MGAs that have a capacity of $50M to $150M and can take on 100% of a project.
BUILDERS RISK +
CRC’s Insurisk Builders Risk + offers exclusive AM Best A- or better-rated capacity for construction risks, providing up to $100M for noncombustible construction and $50M for wood frame projects, including $25M for high-hazard natural catastrophe perils. Written on a proprietary policy form, this fully underwritten facility supports nationwide coverage for new construction, renovations, excess, and midterm projects across target occupancies like real estate, healthcare, hospitality, and government. Available only through CRC Group producers, it operates as a 100% ground-up or quota-share participant, emphasizing innovative, efficient solutions. In 2025, the facility will play a key role in meeting evolving broker and client needs.
RENOVATION PROJECTS
Projects where it is required to insure an existing building along with the portion undergoing structural renovations are still challenging, especially if the building is a landmark or older building (those with existing damage).
These placements require a strong underwriting review to understand how the proposed renovations will impact the existing structure. Also, the market for structural renovations, including existing building coverage, is limited. Generally, if the building values exceed the renovation, most Builders Risk carriers will insure the renovations and ask that the property market continue to cover the existing building. Alternatively, if the renovation values exceed the value of an existing structure, the Builders Risk carrier may be more willing to include coverage for the existing property.
Renovation projects—structural and non-structural—continue to enter the E&S market more frequently. Many standard markets will not extend the project if there are delays, causing sticker shock for the insured. Consulting with an E&S property broker in advance of these projects can help arm retail agents with the knowledge needed to inform the insured of potential financial challenges ahead.
FRAME CAT - WILDFIRE/NS
Even with ample capacity, Frame CAT Builders Risk will continue to maintain a level of firmness, mainly due to the recent wildfire losses, active hurricane season, and sizeable frame habitational fires that continue to occur.
MASS TIMBER PROJECTS
Mass Timber construction continues to surge, ranging from full structural designs to minor decorative elements. The market has select lead and quota share capacity available, given that the product is highly engineered, with ample followup support from a trusted lead. Developers see the benefits of incorporating mass timber, offering sustainability and efficiency benefits. Mass timber presents unique opportunities and challenges in the wholesale insurance market for Builders Risk. Its renewable nature and reduced carbon footprint make it an attractive option for eco-conscious builders. However, insurers must address fire resistance, moisture susceptibility, and structural integrity concerns. The underwriting process is more involved to ensure the sourcing, design, manufacturing, and building firms are adept with the product. One of CRC’s key trading partners is a leader in this space, can offer $50M of capacity, and has insured over 60 mass timber facilities.
UNDERWRITING FACTS:
- Some existing carriers are focusing on crime scores. Higher crime scores can limit capacity, raise premiums, or increase security requirements.
- In general, an improved economic environment will likely support an increase in construction starts in 2025.
- For larger projects, focusing on on-site security and risk controls to mitigate fire, theft, and water damage claims remains key.
- It’s essential to have a good explanation when requesting a project extension. Insureds will likely receive the first extension and even a second one if needed, but obtaining any additional extension beyond that isn’t easy. If a second extension is required, it’s essential to overshoot the timeline.
- Builders Risk rates are reviewed monthly for adjustments, and underwriters have established a quoting cadence that aligns 30 days before the “true” project start date. Retail producers still require budgetary numbers on future projects, and based on our data and knowledge, brokers are providing indication ranges.
- For thorough underwriting, a structural engineering report and a comprehensive building condition report are required for structural renovations.
CAT WIND
The 2024 Atlantic hurricane season saw 18 named storms, 11 hurricanes, and five major hurricanes – classified as Category 3 or higher – marking the ninth consecutive above-average season for the Atlantic basin. However, the vibrant E&S property marketplace has not been heavily impacted. 1/1 CAT treaty renewals went smoothly; markets have significant growth goals and seek to increase capacity on risks that work well with their portfolios. Said differently, oversubscription is ubiquitous, and minimum premiums are lower, pushing rates down and improving terms and conditions for insureds.
It’s not uncommon in a downward cycle that underwriters seek to retain good business, with most carriers/MGAs providing automatic additional capacity on renewals. Clean loss histories marketed well can result in single to double-digit rate decreases. In some instances, these decreases have reached 40% with the elimination of the more extreme 10% - 20% deductibles. Most other retention levels for named windstorm exposures have generally stabilized between 2% - 5%, providing a predictable baseline for insureds.
Smaller Accounts ($100M or less) that were previously shared or layered, which increased the cost, can now be quoted by a single carrier/MGA at much-improved terms.
NORTHEAST
Again, oversubscription is ubiquitous in this space, and we are seeing more standard markets providing 100% of the fire limit while sublimiting wind, which creates opportunities for excess named storm.
SOUTHEAST
The Southeast region is experiencing a heightened state of awareness due to the impact of Hurricane Helene, which has caused some standard markets to pull back, directing more business into the E&S channel. Certain areas of the Southeastern coastline are home to older building structures (i.e., pre-1990), which will impact future ratings. Florida condos are seeing increased competition from admitted carriers. This results in rate decreases in the 15% - 20%+ range with improved terms for good accounts with updates. Older property with no updates may come in flat.
UNDERWRITING FACTS:
- More insurers will be willing to participate on properties that communicate consistent maintenance practices and capture repair/update expenditures, including documentation of work completed.
- Providing carriers with robust amounts of data, i.e., secondary characteristics utilized in modeling, is helping to drive premium savings. Additionally, capturing information about building updates and improvements to wiring, plumbing, HVAC, roofing, and reserve studies for residential associations is critical for maximizing capacity and optimizing pricing. Information about risk mitigation, such as hurricane shutters or roof strapping, defensible space, etc., can also help underwriters underwrite effectively and debit the wind and named storm rating.
- Lenders are starting to push back on insureds to either buy more limits or purchase deductible buybacks (whether it’s AOP, Wind/Hail, Water Damage, etc.), where they may have been more forgiving over the last few years due to market costs and challenges procuring capacity.
EARTHQUAKE
There has been general marketplace improvement, which started in Q1 2024. There is more of an opportunity to expand lines with carriers and reduce carrier count on larger shared and layered deals. Most risks see improved terms and conditions, including rate decreases in the single to double-digit range. Depending on the risk, improvements in terms/conditions can include broadened Earthquake/Earth Movement definitions, enhanced sublimits/extensions, and blanket limits. Risks encompassing older construction are also seeing improved year-over-year rates. Competition and new capacity are growing due to the entrance of newer markets with expanded MGA contractual agreements on small one-off properties and a shared/ layered basis. In other words, MGAs are under more pressure to utilize capacity, which supports increased competition in the marketplace. All risk carriers are willing to include earthquake. London is being very aggressive about including earthquake as well.
CALIFORNIA EARTHQUAKE
California is the epicenter of earthquake risk in the United States. This is a softening market as most more extensive placements are handled by a few larger MGAs that have developed highly efficient models and performance for their reinsurers over the years, especially with no recent events.
The market for tougher risks (age of the building, lack of seismic retrofitting, liquidity of soil, and/or aggregation issues in the area) that do not fall within one of these MGA’s target appetites is stable because these placements are currently structured utilizing shorter limits. Most incumbents are looking to increase line size on renewals.
NEW MADRID
From a daily market perspective, this is still one of the least challenging segments of business to place. Several carriers will quote anywhere from $5M to $25M of capacity. Deductibles are traditionally much lower than California earthquake (2% to sometimes a flat deductible, depending on the carrier), and these carriers tend not to have as many aggregation issues as they might have in other “earthquake-prone” areas.
Excess New Madrid is still needed as the admitted market continues to cut earthquake limits on specific industries, such as hospitals, municipalities, and manufacturing. Our organization is either placing excess over an admitted sublimit or grounding up to a loss limit decided through risk calculation decisions supported by earthquake modeling.
PACIFIC NORTHWEST
The Pacific Northwest is experiencing most of the same market conditions as other earthquake-exposed regions. Competition for better construction is heating up, and more markets are considering properties older than the 1950s with confirmation of seismic work completed or buildings bolted to foundations. New and existing markets will compete to utilize their expanded capacity in 2025.
UNDERWRITING FACTS:
- The age of structures on the property and building type are key factors. Older buildings are often viewed as higher risk. Masonry structures are sometimes seen as a greater risk because there is less give and flexibility.
- Outlining proactive steps to prevent quake damage, such as retrofitting or foundation bolting to avoid damage, can help underwriters better assess risk. Accuracy of the application regarding square footage, construction details, and other details is also key.
- Outlining the potential for ancillary risks such as flooding, fire, and more in the aftermath of an earthquake can also give a more comprehensive view of a property’s overall risk profile.
ENERGY + MARINE
The energy property market remains stable, and capacity remains abundant. Rate reductions are ranging from 7.5% to 10%+. The London market has been aggressive in providing follow capacity. Terms and retentions remain stable. Carriers continue to require business income volatility clauses to mitigate business income losses. As of January 2025, there were two $500M+ losses within the industry - one fire loss in Germany and another in California. It remains to be seen if these will impact the energy property market.
FLOOD
Flood lines in high-risk zones or areas with prior flood history, such as New Orleans, Houston, and many coastal regions, will remain limited. The E&S marketplace still provides capacity on a shared and layered basis. Many specialized flood markets are available, but it’s a question of primary coverage or where the carrier wants to sit in the excess. Regarding open market flood coverage, the more difficult occupancies still include beverage distributors, condos over water, heavy machinery & equipment schedules, and accounts with significant BI exposure. The capacity for accounts with negative elevations or histories of flood claims remains limited and expensive. The flooding associated with Hurricane Helene increased awareness around the potential devastation of floods in areas not previously thought to be flood-exposed.
UNDERWRITING FACTS:
- Flood certificates and risk management mitigation plans are critical for high-hazard exposures.
- Including flood in All Risk coverage may help mitigate increases because the premium allocated for flood is generally lower than stand-alone flood coverage.
HIGH-VALUE HOMES + HABITATIONAL/FRAME APARTMENTS
Historically, the habitational marketplace is the first to harden and begin softening. In short, several markets are reentering the space, particularly MGAs/MGUs. Newer properties (especially sprinklered) continue to be highly sought after and competitively priced, but there is also sustained support for older properties. Multiple carriers and MGAs remain willing to provide coverage for these assets. This fosters increased competition, allowing for consolidation of policies, particularly in excess layers. Older frame and joisted masonry construction in places like Louisiana and Florida, which was previously handled by state-funded plans, can now be more easily placed outside state-funded plans. In summary, most habitational risks already placed in the E&S marketplace, inside or outside of CAT-exposed areas, are seeing rate reductions ranging from 7.5% - to 40%.
UNDERWRITING FACTS:
- More data is needed for all habitational exposures. Information about building updates and improvements to wiring, plumbing, HVAC, roofing, and reserve studies for residential associations is critical for maximizing capacity and optimizing pricing.
- There continues to be a tempered underwriting focus on valuation adequacy, while AOP and CAT deductibles are decreasing.
- Depending on loss history, rates are a function of deductible structure. Getting as creative as possible with per occurence/ aggregate deductibles, trailing deductibles, deductible indemnification agreements, and sideways protection is crucial. Creativity is vital in this space when there is a claim frequency.
- Although markets can decline business due to water damage, including freezing pipes, if an insured can offer very detailed risk mitigation reports, the marketplace is open to revisiting its stance and offering alternative options.
BLANKET, OCCURRENCE LIMIT OF LIABILITY (OLLE), AND VALUES LIMITATION WORDING ENDORSEMENTS
During the most recent hard property cycle, blanket wording became limited through the use of margin clause/values limitation endorsements due to underwriting discipline and the pursuit of accurate valuation. Currently, the valuation focus has tempered. It has become apparent that if an insured’s values are accurate, markets are more open to discussing blanket limits, especially if appraisal reports are provided.
HIGH HAZARD MANUFACTURING/FOOD PROCESSING
The E&S marketplace has become the marketplace for high-hazard risks due to the high loss potential and/or frequency. It’s a constantly shifting space, which became apparent as the market stabilized near the end of 2024. It is common to see 10% - 15%+ rate reductions, improvements in sublimits and deductibles, increasing margin clauses, and blanket limits in specific instances. London and domestic E&S markets continue to lead in this industry segment, with primary layers increasing, which makes it possible to reduce carrier count and consolidate placements. Based on current technical rates, some standard carriers are reemerging to provide primary limits. The need for comprehensive engineering data continues to be imperative for these placements.
UNDERWRITING FACTS:
- Risk engineering is critical—Timely loss control inspections and engineering reports are vital to gaining underwriting interest or enabling carriers to maximize carrier capacity.
- Client/underwriting meetings with agendas focusing on operations and capital expenditure discussions are highly encouraged.
PUBLIC ENTITY + EDUCATION
As new carriers enter the public entity space, capacity remains readily available for municipal risks. Shared and layered placements are seeing expanded lines, carrier consolidation, and improved terms while simultaneously achieving significant rate decreases. In 2025, many municipal risks will see anywhere from 10% to 25%+ reductions. MGAs are expanding into Tier 2 and 3 regions and quoting ground-up risks with smaller TIVs. Competition remains strong from London, Bermuda, and domestic markets, which are helping achieve favorable outcomes for the client.
SEVERE CONVECTIVE STORMS/HAIL
Severe convective storms—including severe thunderstorms, hailstorms, tornadoes, and derechos—seem to be moving from a secondary peril to a primary peril. Underwriting discipline surrounding modeling continues to advance. There are a few specific instances where some primary carriers’ capacity cutbacks will require integrating new capacity to obtain rate reductions. There is more demand for excess convective storm placements, complementing a standard carrier ground-up placement that has a convective storm sublimit.
UNDERWRITING FACTS:
- The increasing severity and breadth of convective storms are hampering the efforts of insurers to diversify their portfolios effectively.
- Secondary perils continue to significantly impact the underwriting results of property insurers, in addition to affecting their policyholders’ surplus.
- Reinsurance market conditions have varied depending on the region and the level of catastrophic activity over the past few years, but terms and conditions have stabilized.
STOCK THROUGHPUT (STP)
This marketplace continues to stabilize, supporting more favorable terms and conditions. Similar to the general property market, new capacity is entering the space. Profit commission endorsements are now more commonly offered on smaller accounts to incentivize market loyalty and risk management best practices. In some instances, certain carriers have product appetite exclusions (i.e., food and beverage products) relating to the personal property of others and inventory. An STP policy can easily include accounts considered out of appetite for others, thus opening the door for carriers with appetite exclusions to reenter and write the real property and business income. Underwriters are also more willing to consider food accounts, particularly distribution.
UNDERWRITING FACTS:
- Fully completed and signed STP applications will receive priority service from underwriters.
TERRORISM/ACTIVE ASSAILANT
Both supply and demand for terrorism coverage have remained stable year over year as coverage is readily available domestically and through Lloyds. Pricing remains competitive, especially in more hazardous locations or urban areas such as New York, Chicago, etc., as there are limited new entrants into the space. Demand for Active Assailant coverage continues to increase as risk managers utilize it to round out coverages due to ongoing security issues. Pricing for Active Assailant coverage is firm, and capacity is readily available depending on business class.
WILDFIRE
Secondary perils, such as wildfires, continue to significantly impact the underwriting results of property insurers, in addition to affecting their policyholders’ surplus. These perils now account for a larger share of the losses from catastrophe events than primary perils such as hurricanes. Said differently, there is more scrutiny on wildfire exposure after the recent California wildfires, as many assumed wildfires primarily occurred only in sparsely populated areas. However, these recent fires spotlight the danger to more populated areas. While the California wildfires may not have a vast rating impact on the marketplace, carriers will further entrench their wildfire coverage positions around rates, limits, and deductible structures for the exposure. Prices and rates will not decrease and should remain relatively flat. Insurers may also reduce line sizes and expand capacity in the second half of 2025.
UNDERWRITING FACTS:
- Wildfires are considered independent events. Modeling for wildfires is evolving, and insurers continue to address exposures to these risks in their portfolios through underwriting and pricing actions.
- All insurers/reinsurers that continue providing coverage in high-hazard areas will want to see more wildfire prevention programs and vegetation management risk mitigation efforts. Put simply, the less fuel there is to burn, the lower the risk.