As we move into 2025, businesses are navigating an ever-changing commercial insurance landscape, where market volatility has become the norm. The last decade has seen a wide range of shifts, from rising premiums to more rigorous underwriting criteria, as insurers continue to respond to economic pressures, rising claims, and emerging risks. Key coverage lines like property, auto liability, cyber, and umbrella have experienced notable challenges, while the workers’ compensation market has remained relatively stable. Meanwhile, factors such as extreme weather events, evolving legal trends, and fluctuations in reinsurance are reshaping the risk environment. The outlook provided below offers a general sense of what to expect, but individual results will vary based on factors like loss experience, business type, and regional operations. For Group Captive clients, pricing will more closely reflect their loss data rather than broader market trends.
Workers’ Compensation
The workers’ compensation market has remained relatively stable, with minimal rate increases across most regions, although some businesses will experience a more pronounced shift if there has been a notable increase in frequency or severity. Key trends include a focus on workplace safety programs, which have helped control loss costs, and a continued emphasis on managing medical expenses. Despite inflationary pressures and rising medical costs, competition among insurers has helped to keep the market relatively soft, though employers with poor claims histories or higher-risk segments may face steeper premiums. Changes to the PA Experience Mod calculation are now in effect and some construction companies may experience premium fluctuation relative to a change in Experience Mod. Click Here to learn more.
Automobile
The industry continues to face upward pressure on rates due to several factors, including rising claim costs, increased litigation, and higher medical and repair expenses. The frequency and severity of claims have been driven by a combination of distracted driving, an increase in commercial vehicle use, and inflation in parts and labor costs. Insurers are also factoring in rising legal expenses, with nuclear verdicts (extremely high jury awards) contributing to overall cost escalation. Underwriters are taking a more cautious approach, focusing on fleet safety management and the use of telematics to mitigate risks. High single digit rate increases are expected, with double digit increases affecting some businesses. The utilization of dash-cameras, telematics, and regular motor vehicle record checks can yield premium savings and fewer claims.
General Liability
Mid-to-high single digit rate increases in the general liability segment are expected due to growing claims severity and evolving litigation trends. Rising social inflation, driven by larger jury awards and a litigious landscape, is a key factor behind increased claim costs. Construction companies should implement strict safety protocols, thoroughly vet subcontractors, perform regular quality inspections, and manage contractual liability to help prevent claims and subsequent premium increases. Businesses with frequent or severe claims are facing more significant cost challenges.
Umbrella/Excess
The umbrella and excess market is expected to experience rate increases of 8%-15% as a construction-industry average. Carriers may push for higher rating increases, as well as tightening of underwriting standards for high-risk industries such as roofers, underground tunneling, and structural steel erectors. Key drivers include rising claims severity, social inflation, and the prevalence of nuclear verdicts, which have resulted in more expensive settlements and jury awards. The presence of private equity firms funding lawsuits has further complicated the market, as litigation funding becomes increasingly more common. While the hard market has passed, carriers are still being selective, often reducing their overall capacity (how much they are willing to offer in limits) while requiring higher underlying policy limits, especially for companies with heavy fleets. Companies who have increased their total vehicles or heavy and extra-heavy trucks could be facing a $5M primary auto limit requirement from their lead excess market. As a result, businesses are facing challenges in finding affordable umbrella and excess liability options, especially those with prior claims or heightened liability exposures.
Property & Inland Marine
Overall, the Property & Inland Marine market continues to experience the hard market that has challenged the construction industry for the past several years. While we expect the “new normal” to continue, some data suggests the market has reached its peak and is beginning to stabilize For companies with adequate Insurance-To-Value, we expect 5%-15% property renewal increases when looking at mandated value increases and rate increases. While not ideal, this certainly is a positive forecast compared to prior year increases. The inland marine market has not been impacted to the extent of property market, but increased costs and decreased capacity in the property reinsurance market have trickled down to the inland marine market. Most contractors will see mid-high single digit increases. In the Builders’ Risk segment, carriers are increasingly competitive and for non-frame projects with favorable loss history. Frame construction continues to be a challenge as carriers continue to increase rates and limit capacity. Contractors with large equipment schedules who have had favorable loss history should expect minimal rate increases.
Pollution & Professional
The environmental and professional insurance market maintains strong overall capacity, with pricing remaining relatively stable for the majority of buyers. Pollution and professional coverages, often combined under one policy, saw minimal rate increases in 2024 and this trend is expected to continue into 2025. PFAS (Perfluoroalkyl & Polyfluoroalkyl Substances) litigation continues to expand and presents a significant exposure to this market. Recent data reports that PFAS settlements in the United States alone are approaching $20 billion. The overall market is stable and most construction companies should expect low single-digit premium increases. However, as new risks emerge and the regulatory landscape becomes more complex and uncertain, insurers may take a more cautious underwriting approach in writing or retaining business.
Management Liability
Carriers are showing greater appetite and favorable terms for lines of coverage such as Crime, Employment Practices, Fiduciary Liability, and Directors & Officers coverage. Businesses are benefiting from increased competition among insurers, leading to more favorable pricing and broader coverage options. Additionally, as companies prioritize risk management and corporate governance, insurers are offering expanded coverage options to address evolving exposures. We expect premium stability and low single-digit increases, although individual loss experience will impact renewal pricing.
Cyber
Global cyber premiums are expected to surpass $20 billion in 2025, up from $15 billion in 2023. Although relatively stable compared to prior years, the cyber market has experienced a 13% increase in claims frequency due to growing cyberattacks, particularly ransomware incidents. As cyber threats evolve, insurers are requiring robust cybersecurity measures such as multi-factor authentication, incident response plans, and regular employee training as prerequisites for coverage. The cost of claims has surged due to higher ransom demands, social engineering, and business interruption, especially with the rise of data privacy laws. Despite these challenges, premium stability is expected with low-mid single digit increases likely.
Conclusion
Overall, we continue to see challenges across the insurance market, while several lines of coverage have presented more stability compared to others. It’s important to remember that these expectations are broad estimates while actual results vary greatly based on each business. Loss history, fleet characteristics, safety programs, and specific company attributes can have significant impacts in renewal pricing. Thankfully, the market remains competitive and our team at McConkey engages our underwriting partners early in the process to find the best coverage, most competitive pricing, and to avoid any unexpected surprises.