Insurance Marketplace Realities 2025 Spring Update – Property

Rate predictions: Property

*Individual accounts may experience greater increases or reductions depending on account specific metrics.

	Trend	Range
Non-cat exposed		-5% to +5%
CAT exposed		-10% to +10%
Single-carrier		-2.5% to +5%
Shared and layered structure		-20% to flat

Key takeaway

The U.S. property insurance market transitioned to a more competitive environment in 2024, particularly for large commercial risks. This trend is expected to persist into 2025, with an oversupply of capacity driving rate relief and favorable renewal conditions for many buyers. However, the market remains bifurcated, with intense competition in certain segments while others remain relatively stable.

Key point: Increased competition and market bifurcation

• Insurers began 2024 reluctant to flatten renewal rates but were compelled to adjust as competition intensified throughout the year.
• The oversupply of market capacity, particularly in shared and layered programs, drove significant rate relief, especially by Q4 2024.
• The bifurcation in the market was most evident during the 2024 renewals, with insureds who faced steep rate increases and restrictive terms in 2023 receiving the most competitive rate relief, particularly in the large-premium shared and layered market. In contrast, insureds with stable terms in 2023 had limited opportunities to improve their programs in 2024, as demonstrated by the single-carrier market, which experienced flat to low single-digit rate increases.

Key point: Catastrophe losses and market impact

• The 2024 Atlantic hurricane season was active but manageable for insurers, with Hurricane Helene (~$15 billion) and Milton (~$20 billion) causing significant losses without destabilizing the reinsurance market.

Key point: Reinsurance market trends

• Ample reinsurance capacity has enabled direct insurers to purchase higher coverage levels at flat to lower rates during the recent Jan. 1 and April 1, 2025 catastrophe reinsurance renewals.

Industry highlights: Heightened climate and tariff inflation risks

• National Oceanic and Atmospheric Administration (NOAA) and Colorado State University predict an above-average 2025 Atlantic hurricane season, with heightened risks for Florida and the Gulf Coast. El Niño-Southern Oscillation (ENSO)-neutral conditions, which are expected to persist through summer 2025, are associated with variable hurricane activity but carry a greater probability of U.S. landfalls and could lead to increased severe weather risks in the spring and summer.
• Cost Index inflation factors have significantly declined from their peak during the 2021 to 2022 inflationary period. However, the recent imposition of wide-ranging tariffs is expected to disrupt supply chains and increase import costs, potentially reigniting inflation in the post-loss replacement of buildings, machinery, equipment and contents.

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Disclaimer

WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).