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Commercial property/casualty insurance lines saw signs of softening market conditions in Q1 2025, found the latest survey from The Council of Insurance Agents & Brokers (CIAB).
However, premiums across all account sizes rose for the 30th straight quarter.
By the numbers: Most insurance lines experienced flat or lower rate increases as premiums across all account sizes rose by an average of 4.2%. That’s down from the 5.4% increase in Q4 2024.
- Commercial auto: Average rate increases jumped to 10.4% from 8.9% in the previous quarter.
- Umbrella liability: Rates climbed to 9.5% from 8.7%.
- Commercial property: Price hikes slowed significantly to 2.9% from 6% in Q4 2024.
- Medical Malpractice: Premiums jumped 1.8% in the quarter.
Five lines recorded decreases in premiums: cyber, directors and officers, employment practices, terrorism, and workers’ compensation.
- Directors and Officers (D&O): Rates dropped for the fifth consecutive quarter, down 1.7%. Increased competition and underwriter flexibility contributed to this trend.
Impact of Third-Party Litigation Funding
Survey respondents highlighted third-party litigation funding (TPLF) as a key driver of higher claims and premiums, particularly in auto liability and excess markets.
- TPLF is a practice where outside parties provide funding for a lawsuit on behalf of the plaintiff in exchange for a cut of the award.
TPLF has led to nuclear verdicts and exhausting coverage limits, making underwriters more cautious. One respondent from a large Southwestern firm said to CIAB, “Third-party litigation funding is hurting the consumer.”
The bottom line: While some lines like commercial auto and umbrella liability, continue to face rising costs, many P/C lines are seeing softening trends.
Still, whether or not the consumer will see their insurance premiums decline largely depends on individual factors, including location, claims history, and other risk factors.
