Table of Contents
The Big Picture
Premium Trends by Coverage Line
What’s Driving the Market
State-by-State Outlook (Q4 2025 → 2026)
Frequently Asked Questions
Sources and Further Reading
The Big Picture
Heading into Q4 2025, the commercial insurance market is steadier than the turbulent 2023–2024 period. Rate momentum has cooled for many buyers, with competitive conditions returning in several lines. Still, litigation-exposed liability (especially umbrella/excess) and catastrophe-exposed property remain selective, and terms not just price—are a key differentiator for insureds.
- Overall pricing: Global commercial rates were down modestly in early 2025, signaling improved buyer conditions, particularly for well-managed risks.
- Capacity: Generally ample for standard property and many professional lines; more constrained for catastrophe zones and large liability limits.
- Implication for businesses: Well-documented risk controls and clean submissions can translate into flat or slightly lower renewals; challenged profiles should prepare for tighter terms and deductibles.
Premium Trends by Coverage Line
Directional ranges vary by industry, loss history, limit needs, and geography.
| Line | Q4 2025 Market Posture | Heading into 2026 | What it means for buyers |
|---|---|---|---|
| Commercial Property | Improved for standard risks; selective in catastrophe zones (wind/hail, wildfire, flood). | Stable to slightly down for non-CAT; continued discipline on deductibles/terms in high-hazard areas. | Mitigation proof, construction details, and location data materially influence outcomes. |
| General Liability | Stable to firm; litigation venue matters. | Mostly stable; underwriting favors clean losses and strong contracts/risk transfer. | Document vendor/contractor indemnification and safety programs. |
| Umbrella/Excess | Firm; “nuclear verdicts” keep pressure on pricing and limits. | Likely firm where social inflation is pronounced. | Consider layered towers; evaluate higher retentions with modeling support. |
| Commercial Auto | Firm on severity; parts/labor inflation and attorney involvement persist. | Stable to modestly up; telematics and driver safety can unlock credits. | Invest in MVR standards, telematics, and targeted training for high-frequency loss types. |
| Cyber | Moderating for well-controlled risks; remains event-sensitive. | Flat to modest relief if controls stay strong; could re-harden post-event. | MFA, EDR, backups, IR testing, vendor security, show evidence in submissions. |
| D&O | Competitive with more capacity; reductions case-by-case. | Mostly flat to slightly down for clean profiles; sector-specific caution remains. | Strengthen governance/disclosure; address sector exposures early. |
| Workers’ Comp | Stable overall; state variability by filings and wage trends. | Stable with pockets of change tied to medical severity and rules. | Leverage safety programs and RTW plans; track class codes and payroll accuracy. |
What’s Driving the Market
- Claims & social inflation: Larger jury awards and litigation funding sustain pressure on casualty, especially umbrella/excess.
- Catastrophes & reinsurance: Elevated catastrophe losses keep underwriting selective in coastal, hail, and wildfire regions.
- Inflation & supply chain: Materials, labor, and repair costs influence severity across property and auto.
- Competition & capacity: Increasing in property (non-CAT) and professional lines, supporting flatter outcomes for prepared buyers.
- Regulatory shifts: State actions (e.g., FAIR Plan expansions, depopulation programs) and filing cycles shape local outcomes.
State by State Outlook (Q4 2025 → 2026)
Legend: Property outlook reflects standard risks unless noted; Casualty/Auto emphasizes liability/umbrella and commercial auto; WC is workers’ compensation directional view. Local venue, industry, values, and loss history can change outcomes.
| State | Property | Casualty / Auto | WC | Notes for Buyers |
|---|---|---|---|---|
| CT | Stable/slight relief | Firm | Modest decreases in recent filings | Litigation less intense than hotspots; coastal wind deductibles near shore. |
| MA | Improving (non-CAT) | Firm | Stable | Coastal wind scrutiny; engineering reports help. |
| ME | Stable | Firmish | Stable | Wind/hail deductibles on the coast are common. |
| NH | Stable | Firm | Stable | Winter weather supports auto severity vigilance. |
| RI | Stable | Firm | Stable | Coastal wind deductibles; flood mapping matters. |
| VT | Stable | Firm | Stable | Recent floods highlight the value of mitigation. |
| NY | Capacity improving | Firm (venue-sensitive) | Stable | Large verdict risk keeps umbrella selective. |
| NJ | Mixed on coast | Firm | Stable | Reinsurance pass-through may impact pricing. |
| PA | Stable | Firm | Watching medical cost trends | Venue and claim trends vary by county. |
| DE | Stable | Firm | Medical uptrend noted | Small market; underwriting selectivity matters. |
| MD | Stable | Firm | Stable | Coastal wind & flood diligence help pricing. |
| DC | Stable | Firm (urban liability) | Stable | Umbrella pricing sensitive to venue. |
| VA | Stable | Firm | Stable | Coastal properties scrutinized for wind. |
| FL | Challenging but improving competition vs. 2023–24 | Firm | Stable | Citizens depopulation & reforms slowly helping; outcomes vary by county and risk. |
| GA | Stable inland; SCS vigilance | Firm | Stable | Hail/wind exposure influences deductibles. |
| NC | Stable | Firm | Stable | Coastal wind zones: stricter terms. |
| SC | Mixed on coast | Firm | Stable | Hurricane exposure drives CAT deductibles. |
| AL | Mixed (coastal wind) | Firm | Stable | Storm hardening improves posture. |
| MS | Mixed (Gulf CAT) | Firm | Stable | Inland risks fare better than coast. |
| LA | Still stressed but improving under 2024–25 reforms | Mixed to firm | Stable | Affordability remains a watch item into 2026. |
| TX | Bifurcated: inland improving; hail/tornado/coast tough | Firm | Stable | Nation-leading SCS/hail activity; roof upgrades matter. |
| IL | Stable | Firm (litigation) | Stable | Venue sensitivity for umbrella. |
| IN | Stable | Firm | Stable | Manufacturing fleets: emphasize driver training. |
| IA | Stable (hail deductibles trending) | Firm | Stable | Roof and elevation data help pricing. |
| KS | Mixed (hail/tornado corridor) | Firm | Stable | Hail-resistant roofs are a differentiator. |
| MI | Stable | Firm | Watching comp policy debates | Venue matters for umbrella. |
| MN | Stable | Firm | Stable | Winter and hail patterns drive terms. |
| MO | Stable/Mixed (SCS belt) | Firm | Stable | CAT deductibles trending higher in hotspots. |
| NE | Stable | Firm | Stable | Wind/hail history weighs heavily. |
| ND | Stable | Firm | Stable | Rural logistics can affect repair timelines. |
| OH | Stable | Firm | Stable | Strong safety data can earn credits. |
| SD | Mixed (hail) | Firm | Stable | Roofing specs and claims history matter. |
| WI | Stable | Firm | Monitoring medical severity | Watch WCRI and state filings into 2026. |
| CO | Mixed to firm (hail/wildfire) | Firm | Stable | Wildfire mitigation & hail-resistant roofs help. |
| MT | Mixed (wildfire) | Firm | Stable | Wildland-urban interface is a focus. |
| WY | Stable | Firm | Stable | Remote repairs affect BI periods. |
| AZ | Stable | Firm | Stable | Monsoon/heat underwriting attention growing. |
| NM | Mixed (wildfire/flood) | Firm | Stable | Post-fire flood mapping is influential. |
| NV | Stable | Firm | Stable | Heat, water, and supply-chain context considered. |
| UT | Stable | Firm | Stable (NCCI cycles) | Population growth shifting exposures. |
| CA | Split: improved competition for standard risks; tight in wildfire zones; FAIR Plan limits expanded in 2025 | Firm | Stable | Mitigation proof and engineering reports are decisive on terms and deductibles. |
| OR | Stable/mixed (wildfire) | Firm | Stable | Wildfire defensible space and water supply data help. |
| WA | Stable/mixed | Firm | State fund proposes avg +4.9% for 2026 | Confirm class-level rates with L&I tables. |
| AK | Stable/mixed (quake, remote repairs) | Firm | Stable | Contingent BI and logistics matter. |
| HI | Mixed (wind/volcanic ash localized) | Firm | Stable | Supply-chain and reconstruction timelines affect BI sizing. |
| KY | Stable/mixed (flood-prone areas) | Firm | Stable | Elevation certificates and flood controls help. |
| TN | Stable/mixed (tornado belts) | Firm | Stable | Roof and envelope specs are influential. |
| WV | Stable | Firm | Some comp reductions noted | Venue improves predictability vs. hotspots. |
| AR | Stable/mixed (SCS) | Firm | Stable | Wind/hail mitigation and claims data key. |
| OK | Mixed to firm (hail/tornado) | Firm | Stable | Layered property programs common in hotspots. |
| ID | Stable/mixed (wildfire) | Firm | Stable | Defensible space and water availability noted. |
Frequently Asked Questions
Will premiums broadly fall in 2025? Not broadly. Many buyers of standard risks are seeing flat to slightly down outcomes, but casualty with high litigation exposure and CAT-exposed property often remain selective with firm terms and higher deductibles.
Why is umbrella/excess still tight? Social inflation and large jury awards push up severity, so carriers remain careful about limits and pricing, even when other lines are easing.
Is cyber finally stable? For firms with strong controls (MFA, EDR, backups, IR testing, third-party risk), many renewals are flat to modestly down; a major systemic event could change conditions quickly.
How early should we start our renewal? Begin 90–120 days before renewal — earlier for layered property towers, catastrophe exposures, or complex international programs.
What matters most to improve terms? A clean, evidence-based submission: mitigation documentation (wildfire, hail, flood), telematics and driver training data, cyber control attestations, updated valuations, tight contracts and risk transfer.
Sources and Further Reading
- Aon — Q1 2025: Global Insurance Market Overview and Q2 2025: Global Overview (Market stability and line-by-line context)
- Marsh via Insurance Journal — Global commercial insurance rates down 3% in Q1 2025
- WTW — Insurance Marketplace Realities 2025 (Spring Update) and D&O/EPL chapters (D&O, EPL)
- Insurance Journal — Commercial property market in a “better place” (USI mid-year)
- USI Mid-Year Addendum coverage — $100B is the new bar for property CAT losses and P&C market shifts amid high CAT losses
- California Department of Insurance — FAIR Plan commercial limit expansion (Mar 28, 2025) and Reform made real (Jul 24, 2025) (temporary high-value commercial option)
- California DOI briefing (PDF) — Commissioner approves major FAIR Plan expansion (details)
Also useful for 2026 planning: NCCI’s State of the Line and anticipated effective dates (workers’ comp), WCRI state trend reports, and state fund rate announcements (e.g., Washington L&I).
Disclaimer: Insurance conditions differ based on location, industry sector, and individual risk profiles. Always consult with a licensed insurance professional to discuss your unique situation and the latest market data. The information here represents insights as of late Q3 2025 and may evolve with new developments.
Matthew List
