Softening P&C Market Comes Into Focus
Premium increases dropped in Q1 2025 for all account sizes, and five business lines showed decreases, according to The Council’s P/C Market Survey.
The first quarter of 2025 saw tighter premium increases for all account sizes and most lines of business in the commercial property and casualty market, according to The Council’s latest P/C Market Survey.
Premiums across the various account sizes rose by an average of 4.2%, a 22% decrease from the 5.4% average increase recorded in Q4 2024. Medium accounts fell the most: respondents reported an average increase of 3.7% in Q1, down 42% from the previous quarter’s 6.4%. Meanwhile, small accounts rose on average by 3.6% (even with Q4) and large accounts by 5.3% (falling from 6.3%).
Premiums across the major lines of business (commercial auto, commercial property, general liability, umbrella, and workers compensation) rose by an average of 4.9%, compared to 5.4% in Q4 2024. Commercial property premiums, which experienced stark increases in 2023 and 2024, rose by an average of just 2.9%, less than half Q4 2024’s 6.0%.
The business lines reporting premium decreases were cyber, D&O, employment practices, terrorism, and workers compensation. That was one more than in Q4 2024. This was also the third record low decrease for cyber in the past year, at an average of -2.1%.
In contrast to other lines, commercial auto and umbrella had larger increases in Q1 2025 than in Q4—auto had the highest increase out of all lines, at 10.4%, followed by umbrella at an average increase of 9.5%.
Respondents pointed to third-party litigation funding as a major cause of the problems facing commercial auto and umbrella: it ballooned claim costs and frequency, pushed up premiums, and triggered more underwriter scrutiny, leading them to cut limits for auto and umbrella coverages.
