P C REPORT
2025 FORECAST
WHAT’S INSIDE:
Impact of California Wildfires
Key Trends in Rate, Capacity, and Terms & Conditions
Line of Business Insights: Personal, Commercial, Casualty, Professional Liability, Environmental and Transportation
London Market Outlook
OVERVIEW
Contributor:
Paul G. Smith
Corporate Senior Vice President
H.W. Kaufman Group New York, NY
Click here for contact details >>
California wildfires
While this report highlights the growth in Excess & Surplus (E&S) policies and other trends in the Property & Casualty (P&C) sector as we enter 2025, we must first address the devastating wildfires in southern California, which have significantly impacted the industry and local communities. Current estimates suggest these wildfires have caused $25 billion to $30 billion in insured losses, making this a defining event for the region and the insurance sector.
The loss of life is the most profound and tragic outcome, and our thoughts are with all those affected. Should you have questions or need assistance regarding client coverage, please do not hesitate to reach out to our team.
The widespread property damage, fueled by unseasonably dry conditions and fierce Santa Ana winds, has also raised critical challenges for the insurance industry. More insights, both from a Personal and Commercial Insurance perspective, can be found further in this report.
E&S status and sustained growth
Most market experts agree that E&S will continue to comprise a larger percentage of the Commercial Insurance marketplace, grabbing market share from traditional carriers. As we look back on 2024 and ahead to 2025, a prevalent trend in the P&C sector is continued growth in non-admitted policies.
These non-admitted carriers have altered the industry, impacting how both established, traditional admitted carriers and small, boutique firms operate.
KEY TAKEAWAYS
• The January wildfires in southern California affected areas not typically prone to such risks, making the situation particularly alarming for insurers and residents alike.
• Despite challenges, the E&S market is expected to continue growing, although at a slower pace when compared to recent years.
• As we move into 2025, small businesses may see modest premium increases, while larger businesses with extensive portfolios could benefit from potential decreases in Commercial Property insurance rates.
• The Casualty market is expected to remain moderately hard, with increased costs due to smaller capacity.
• Historically, risk mitigation was more closely aligned with Commercial Insurance, but it is now increasingly relevant in Personal Insurance.
• The Professional Liability market is expected to remain stable throughout 2025, with abundant capacity in most segments.
A 2024 Conning Report projects that non-admitted market growth will continue in double digits, albeit at a slower pace in the years ahead, approaching $111 billion in premiums in 2024. This would account for nearly 10 percent of the United States P&C industry.
Reasons for continued, but somewhat slower growth include:
• Increasing state regulation: State regulatory commissions will likely take a closer look at non-admitted policies in the coming years—specifically in Personal lines and in states where capacity constraints and affordability issues are raising questions with elected officials.
• Inflationary pressures: Nuclear verdicts and CAT weather events have grown in recent years, placing more stress on the P&C market.
• Consumer preferences: Some consumers prefer admitted policies, which allows them to appeal to states in the event of insurer insolvency.
Rea sons for sustainable growth include:
• Admitted carrier actions: The growth of the E&S market is also being fueled by an increasing number of non-admitted divisions being formed by established carriers. This may reduce the number of new non-admitted carriers entering the marketplace. Many industry experts also believe that the admitted and non-admitted markets will slowly merge.
• Predictive underwriting: Traditional carriers are more willing to invest in E&S business because of increased demand, and their access to more data and analytic information which is used to help make informed underwriting decisions. This access allows carriers to model the risks more effectively, in theory reducing the uncertainty and increasing predictability.
• Technology improvements: In addition to accurate and advanced risk modeling, the need for greater efficiency and productivity is crucial. The E&S space continues to make technology improvements to make the jobs of retail brokers and agents easier. Burns & Wilcox has developed a direct retail platform –IssueQuick – which allows brokers to quote and issue a variety of policies for their clients in about 5 minutes.
• Specialization: Traditional admitted carriers are often unable to provide affordable options for some clients operating in specialized sectors. In this way, E&S is assisting an entire industry with insurance and risk management that otherwise would not be available.
Rate
The rate picture in the Personal space has altered with the southern California wildfires. At the end of December, the belief was that rates for Personal policies would moderately rise. While each individual situation is different, higher rate increases are likely. In fact, many clients may also be faced with non-renewals, especially in higher-risk geographic regions.
Excess Liability rates are on the rise as well. As with other sectors, it often takes multiple carriers to meet limit demand. Rates are more variable in Casualty, which should still see increases, and Liability, which may experience decreases in some areas.
Capacity
The expectation is that there will be a slight increase in capacity for all lines of business, although once again, Personal lines may see some constriction in higher-risk wildfire areas. As previously mentioned, large, traditional carriers are more willing to operate a division in the non-admitted space given the growth there, which can open up opportunities for brokers and agents to quote business that was not previously available.
Even in hard-to-place sectors like Habitational and Transportation, Burns & Wilcox offers the collective experience and carrier relationships to find capacity for just about any need. It may require more layering in some areas than in past years, but solutions are usually available.
Terms & Conditions
Exclusions continue to be added to policies in the P&C space, and challenging sectors will be faced with restrictive terms and conditions. Brokers and agents should review policies in detail with the clients, and research different options that might be more favorable. Renewal changes in terms and conditions remain possible, if not likely.
As we know, the E&S market offers freedom of rate and form, and thus the advantages of adaption to market conditions. As mentioned in our quarterly P&C report in July 2024, we do not expect established carriers to relax their Terms & Conditions in the near future; carriers still want to qualify language where needed.
2025 FORECAST BY LINE OF BUSINESS
On the Burns & Wilcox Eye on 2025 webinar hosted on January 9, 2025, our industry-leading subject matter experts delivered valuable insights into the evolving insurance landscape.
Click here to view the recording >>
In the following pages, our experts delve deeper into specific sectors within P&C, explore trends and share outlooks for the year.
PERSONAL INSURANCE (U.S.)
Contributor:
Bill Gatewood
Corporate Senior Vice President
National Personal Insurance Practice Leader
Burns & Wilcox
Detroit/Farmington Hills, MI
Click here for contact details >>
California wildfires
The California wildfires have brought devastating loss and hardship to countless communities. As of publication, more than 60 square miles and 15,000 structures have burned in the Los Angeles area. Within 48 hours of the wildfire outbreak, our partners at Wildfire Defense Systems (WDS), a leading private company specializing in wildfire loss prevention and mitigation, described the scale of damage as “unprecedented” and among the most significant geographic risks they have encountered.
Beyond the human and environmental toll, this has become a landmark event for both the region and the insurance industry and could lead to further tightening of capacity, higher premiums, and stricter underwriting in an already hard P&C market. Several factors make these wildfires particularly noteworthy:
Many of the destroyed structures were in areas previously assessed as “moderate” or “low” wildfire risk, emphasizing the unpredictable nature of this peril.
Damage extended into suburban and urban areas, impacting a higher proportion of commercial properties than typically seen in wildfire events.
A significant number of affected policyholders were insured through admitted carriers or the California FAIR Plan, which insured more than 450,000 properties prior to these wildfires.
California and the broader Western U.S. entered 2025 in a challenging P&C market, with high hopes for stabilizing rates, reduced exclusions, and increased capacity. While the January wildfires may complicate those expectations, they also highlight the importance of ongoing innovation and collaboration across the industry.
Emerging legislative across the U.S.
Colorado has announced it will launch a market of last resort modeled after the California FAIR Plan. That plan could help address higher risks seen in Colorado from wildfire, wind and hail exposures.
Several states that have been hard hit by carrier exits in the Personal markets are considering legislative action designed to make insurance more affordable and available.
In the immediate term, carriers are likely to reassess risk models, reinsurance arrangements, and underwriting strategies. Renewals may face disruptions, but these challenges also present opportunities for the market to refine approaches and for insureds to bolster preparedness. The southern California wildfires underscore a broader trend: catastrophic (CAT) risks are no longer confined to traditional hurricane zones or seasonal expectations.
Before the recent wildfires, the California Department of Insurance had drafted legislation that would require carriers in the state to take on a proportional amount of high-risk wildfire business in relation to their market share there. That regulation would also now allow the inclusion of the cost of reinsurance in actuarial rate making and using forward-looking modeling to predict losses.
For example, since Hurricane Ida in August 2021, rates for customers of Louisiana Citizens Property Insurance Corp., the state-run insurer of last resort, have increased by 164 percent on average, according to research conducted by The Times-Picayune newspaper Several carriers have exited the Personal market in coastal communities in Louisiana. The Louisiana Insurance Commissioner initiated legislation in 2024 that could reduce insurance regulations in an effort to attract carriers back to Louisiana to offer Homeowners policies.
Similar legislation has or will be introduced in other states such as Florida and Georgia that have been hit hard by CAT claims.
Risk mitigation remains critical
We have been reminded that even the most purposeful mitigation strategies cannot provide protection in a worst-case CAT scenario. However, continued attention to proven risk mitigation tactics will go a long way to sustain the Homeowners market.
Residential Property owners are increasingly embracing strategies they can use to appear less risky to carriers, such as:
Utilizing automatic water shut off devices.
Creating defensible space around homes in brush areas.
Investing in high-quality roofs and roof materials, especially in higher-risk CAT areas.
Considering higher deductibles for wind, wildfire and more.
COMMERCIAL INSURANCE (U.S.)
The recent California wildfires will have significant and lasting effects on the insurance industry. For insights into the implications of this catastrophic event, please refer to the Personal Insurance section of this report.
In the Commercial Insurance sector, the expectation for 2025 is that the market will continue to firm up, leading to the potential of reduced limits for some classes of business. Traditional carriers are now taking on smaller portions of business, which has increased demand for non-admitted carriers.
The Commercial Property market is showing some shifts. Small businesses are likely to see modest increases in premiums, but nothing as drastic as in recent years. Meanwhile, larger businesses, especially those with extensive property portfolios, may benefit from some reprieve, with potential decreases in premiums due to increased market capacity. However, valuations will remain a critical factor for all businesses, as having accurate valuations will be key to securing favorable rates.
In many Casualty areas, we anticipate moderate rate increases to help keep pace with inflation and overall loss costs.
However, there are some bright spots, such as Manufacturing & Distribution, which is becoming more appealing to carriers looking to grow their portfolios, and some insureds may experience lower rates as a result.
Overall, the Commercial Insurance landscape in 2025 suggests significant shifts in coverage dynamics and carrier strategies. Depending on risk location, class of business, loss history, and other pertinent underwriting data, the market is dynamic, and pricing risks individually based on merit. During these times, partnering with Burns & Wilcox is essential in securing comprehensive solutions.
Contributor:
Bryant Steele Regional Vice President
Upper
Midwest
Burns & Wilcox
Chicago, IL
KEY COMMERCIAL TRENDS FOR 2025:
Artisans & General Contractors: Standard carriers are re-entering the sector with possible rate decreases for some insureds.
Transportation: Multiple carriers are often now required to provide the same limits of insurance that a single admitted carrier used to offer just a few years ago.
Construction: This sector remains challenging, with expected higher rates. However, some carriers see opportunities in certain regions to increase their market share.
Hospitality: The sector continues to face challenges, particularly in coastal areas and those with liquor-driven exposures .
Real Estate: Any accounts with Habitational exposure should anticipate a challenge. Business within “Hab” is flocking to the non-admitted marketplace, primarily due to the significance of claims arising from Assault & Battery (A&B). Clients should expect sublimits on A&B and possible exclusions as claims within this area have recently skyrocketed.
PROFESSIONAL LIABILITY (U.S.)
The Professional Liability market remains in a stable place with some soft areas and abundant capacity that can help limit the impact of large settlement rewards.
There are more than 3 billion phishing emails sent by cyber criminals globally every day.
One of the more interesting sectors in Professional Liability is in the Cyber space. Cyber is experiencing growth as the adoption by clients in the market increases. However, it is unknown how much artificial intelligence (AI) may impact Cyber as technology and AI itself evolves. There are already more than 3 billion phishing emails sent by criminals globally every day, and growing, so as the threat continues to rise the demand should as well. Some experts believe these, and other factors could lead to an escalation in pricing.
Contributor:
Andy Wood Vice President National Professional Liability Practice Leader Burns & Wilcox Chicago,
IL
Click here for contact details >>
KEY PROFESSIONAL LIABILITY TRENDS FOR 2025:
Architects & Engineers: Appears to be growing with carriers showing interest in expanding their portfolios. Pricing trends, though, have yet to be determined.
Healthcare: Experiencing few changes. However, long-term care facilities, foster care organizations, and similar entities are facing a growing risk of molestation and abuse claims. Additionally, some states mandate Sexual Abuse and Molestation coverage for specific businesses.
Management Liability: Stable and soft for now with pockets of hardness in California.
Sexual Abuse & Molestation: This specialized liability coverage is in demand. In fact, the increase in such claims has made it exceedingly difficult for many clients to secure insurance coverage. Burns & Wilcox can often find solutions for hard-to-place policies in this space for insureds who otherwise would not have access to it.
ENVIRONMENTAL INSURANCE (U.S.)
Contributor:
Gina Jones Vice President Director, Environmental Programs
Burns & Wilcox
Denver, CO
Click here for contact details >>
The Environmental Insurance marketplace for 2025 continues to evolve, requiring us to adapt to the changing environment, underwriting practices, and market conditions. While competition for capacity remains extensive, we are witnessing ongoing increases in insurance rates. Some clients, facing heightened insurance costs in other lines of business and general inflation, are opting to non-renew or reduce their Environmental Insurance coverage.
Additionally, terms and conditions are tightening, with higher deductibles and lower limits becoming the norm, particularly in cases where an Excess policy is in place. Many Excess markets are also reducing their overall capacity, making it more challenging to find suitable solutions.
A key topic of concern is the impact of per- and polyfluoroalkyl substances, commonly known as PFAS. Many experts think these human-made chemicals have serious health implications. Often referred to as “forever chemicals,” PFAS can be found in a wide range of products, including Teflon, fire retardants, winter coats, and takeout pizza boxes. The EPA has linked exposure to PFAS to various health risks. While the full impact of PFAS on the insurance industry and the extent of client exposure are still uncertain, some industry experts fear it could parallel the seriousness and volume of asbestos-related issues.
As regulatory thresholds for PFAS are established, insureds should expect restrictions and exclusions to be added to their Environmental Insurance policies. Coverage may still be available where there is little or no exposure.
The frequency and severity of Environmental claims are expected to continue rising in 2025.
The frequency and severity of Environmental claims are expected to continue rising in 2025. Pollution incidents are becoming more common and severe, largely driven by natural disasters such as extreme weather events (e.g., wind, flooding, wildfires, earthquakes), climate change, and human-made environmental disasters. Claims related to mold and Legionella are also rising, alongside a continued prevalence of nuclear verdicts in the Environmental sector.
Energy
The Energy Insurance sector is financially healthier in 2025 and shows signs of recovery. Although it remains in a hard market facing capacity challenges, global oil production and consumption have returned to pre-pandemic levels, and rig activity has increased significantly.
In addition to geopolitical factors, investments in environmental, social and governance (ESG) programs and technologies are also growing and are driven by government regulations, corporate objectives, and consumer demand. Energy companies are investing in technologies to capture emissions and improve efficiencies to achieve net-zero carbon emissions in the coming years. Brokers and agents are actively collaborating with clients on ESG planning, including finding policies supporting landfill strategies, thermal recovery, lead reduction, and more.
At Burns & Wilcox, we offer binding authority in-house, access to an exclusive Oil & Gas Consultants Program, and a broad appetite for renewable energy risks. Our professionals have the experience and industry connections in the U.S. to identify the best solutions and secure options for any insurance need, including packaging General Liability, Pollution Liability, Professional Liability, Companion Auto, Companion Workers’ Compensation, Property, Inland Marine, Excess, and Cyber policies.
Renewables are another area of growth in the Energy industry. Many U.S. energy companies are investing in renewable innovations like windmills and solar technologies, the latter becoming increasingly feasible due to advancements in storage technologies and solar batteries. The insurance industry also invests in these areas, with many retailers and brokers establishing dedicated renewable divisions.
As the energy industry continues to evolve with global and economic trends, building and maintaining strong relationships with carriers is essential for brokers and agents to ensure clients have access to available coverage. Submitting quality applications that answer all required questions and provide additional relevant details is beneficial. Creativity identifying available solutions, emphasizing coverage and value rather than cost, and partnering with multiple carriers will position brokers and agents favorably, regardless of oil and natural gas price fluctuations.
TRANSPORTATION INSURANCE (U.S.)
As we enter 2025, the Transportation Insurance market is poised for significant changes, offering both challenges and opportunities for brokers. Understanding these dynamics is essential for positioning clients effectively.
Widespread rate increases are expected, with carriers seeking hikes of 8% to 40% depending on the class of business. While some large, high-performing accounts may see flat renewals, rising claims costs, especially from nuclear verdicts, are driving these adjustments. An example is the $462 million verdict in 2024 against a semi-trailer manufacturer for a decades-old product design flaw, highlighting carriers’ financial risks.
Regulatory changes are also underway, with several states increasing minimum liability limits to address social inflation and rising healthcare costs. For instance, New Jersey doubled its heavy truck liability requirement to $1.5 million in July 2024. Brokers must stay informed to ensure compliance and adequate coverage for their clients.
Preparation is key to navigating these challenges. Engaging early with insureds allows for proactive discussions about pricing and coverage options, while transparent communication helps manage expectations and strengthen relationships. Building strategic market connections is more important than ever.
TIP FOR BROKERS
Engaging early with insureds allows for proactive discussions about pricing and coverage options, while transparent communication helps manage expectations and strengthen relationships.
The Burns & Wilcox Transportation Practice Group is dedicated to supporting brokers in achieving the best outcomes for their clients, offering deep expertise and exclusive solutions. Through Atain, an “A” rated (Excellent IX by AM Best) insurance carrier that is part of the H.W. Kaufman Group family of companies, we provide unique opportunities for General Liability and Excess placements. Additionally, our access to the global Excess marketplace helps us meet the demands of complex exposures and high limit placements.
Contributor:
Erich Steinhaus
Senior Broker
Burns & Wilcox Brokerage Chicago, IL
Click here for contact details >>
PERSONAL INSURANCE (CANADA)
Contributor:
Michelle Allemang
Manager, British Columbia
National Product Leader
Personal Insurance
Burns & Wilcox
Vancouver, BC
Given the billions of dollars in catastrophic storm damage over the past year, we anticipate continued price increases in the Canadian Personal Insurance Property market throughout 2025. As expected, we have already begun to see non-renewals due to the unprecedented losses from these catastrophic weather events. Additionally, some markets are withdrawing from the Personal Insurance sector due to concerns about profitability and rising reinsurance costs.
The High-Value Homeowners market remains particularly challenging, with many clients facing significant renewal increases as carriers adjust their rates to better reflect the high limits of single-risk exposure. Some insured individuals may need to seek new coverage because inflation has raised their insurable limits above the maximum thresholds set by some carriers.
To better prepare insureds for potential rate or coverage changes, it is crucial to address renewals early and provide guidance on how homeowners can mitigate certain risk exposures. Homeowners who effectively manage their heightened risk exposures will have a better chance of securing comprehensive insurance solutions. For example, installing water leak detection devices, whether before or after experiencing a water claim, may help meet insurer eligibility criteria or result in potential premium discounts.
TIP FOR BROKERS
To better prepare insureds for potential rate or coverage changes, it is crucial to address renewals early and provide guidance on how homeowners can mitigate certain risk exposures.
Burns & Wilcox is well-equipped to meet the growing demand for Hard-to-Place Homeowners Insurance. In 2025, we will launch new Canadian specialty homeowners and dwelling solutions. These programs will cater to mid-range and high-value homes, accommodating properties with prior losses, catastrophic risk exposure, seasonal use, rental activities, vacant or renovation risks, in-home businesses, and more.
COMMERCIAL INSURANCE (CANADA)
Contributors:
Patricia
Sheridan
Associate Managing Director
Burns & Wilcox
Toronto, ON
Click here for contact details >>
Steven
Hrab
Director, Construction Burns & Wilcox
Toronto, ON
Click here for contact details >>
PROFESSIONAL
LIABILITY (CANADA)
Contributor:
Danion Beckford
Senior Underwriter
Professional Liability
Burns & Wilcox
Toronto, ON
Click here for contact details >>
As we enter 2025, the Canadian P&C insurance marketplace remains challenging. While there is some optimism for stabilization, shifts in the competitive landscape are affecting capacity and underwriting approaches. The low premium rates we have seen are not likely sustainable in the long term.
The market’s rapid softening in 2024 could continue into 2025, especially if rates do not begin to stabilize. In this environment, Burns & Wilcox is here to support brokers with expertise and specialized products. We have a strong appetite for challenging General Liability (GL) risks, particularly with Contractors, U.S. product exposure, and Hospitality. Properties with vacancies, mixed occupancies, and hospitality exposures are specialties of Burns & Wilcox.
Our programs are designed to help brokers secure competitive coverage. Specialized solutions include those listed above plus Small Low-hazard Contractors, Welding Contractors, Real Estate firms and more. We recognize the pressure brokers face to deliver fast solutions and are committed to providing same-day or next-day quotes for most risks we assess.
Construction
With further reductions in interest rates, there has been an increase in the number of new construction and renovation projects across commercial and residential properties, and we expect this trend to continue in 2025.
With over a decade of experience in the Construction Insurance space and wellestablished market relationships, Burns & Wilcox delivers highly competitive product offerings paired with superior service.
The Professional Insurance market continues to adapt to the increasing challenges of 2025. Cyber threats remain a pressing concern, yet many insureds still lack adequate coverage. This gap underscores the importance of offering flexible Cyber Insurance options—whether standalone or as an add-on—to safeguard against the financial and operational fallout of cyber breaches.
Additionally, the demand for tailored coverage in the Architects & Engineers (A&E) and Miscellaneous Errors & Omissions (E&O) sectors is growing. To meet these needs, Burns & Wilcox has partnered with new markets this year, enhancing our ability to deliver innovative and competitive solutions that address the unique exposures facing these professional industries.
At Burns & Wilcox, we remain focused on empowering brokers to educate their clients and navigate complex risk exposures. By combining our market expertise with a commitment to exceptional service, we aim to provide the resources you need to build trust and deliver tailored solutions.
ENVIRONMENTAL INSURANCE (CANADA)
The Canadian Environmental market ended 2024 in a soft position, in addition to some observed capacity hardening in specific areas, leading to a challenging overall trading climate. This situation was exacerbated by the typical rush in the latter half of the Canadian business cycle to capture new market share, often at relatively unsustainable pricing in some cases. Additionally, there was a notable volume of mergers and acquisitions, self-insurance, and business lapses, contributing to the results for 2024. As of early 2025, it is still uncertain whether these trends will continue.
Given this context, Canadian brokers are advised to seek out Environmental underwriting partners who focus on long-term stability, balancing sound underwriting practices with cautious rating strategies in 2025. Strategic brokers are expected to seek like-minded underwriters, with the collective aim of achieving stability and prioritizing high retention during these turbulent times, as this approach is sustainable in soft markets and ultimately benefits the client.
TIP FOR BROKERS
Canadian brokers are advised to seek out Environmental underwriting partners who focus on long-term stability, balancing sound underwriting practices with cautious rating strategies in 2025.
In the Commercial Insurance sector, particularly in lower-margin and more technical specialties like Environmental Impairment Liability (EIL), strong relationships are crucial, especially during soft markets. Continued success in securing new business will depend on providing robust coverage, competitive pricing, and maintaining strong, collaborative, long-term relationships between underwriters and brokers. This focus on relationships ultimately benefits the client.
. Contributor:
Karim Jaroudi Manager Environmental Burns & Wilcox
Toronto, ON
TRANSPORTATION INSURANCE (CANADA)
The trucking and logistics market is expected to continue its cautious recovery in 2025. Rates in 2025 are likely to remain stable or increase slightly; however, higher-risk sectors, such as those involving cross-border transport, may see modest rate increases. While less volatile sectors might experience more predictable pricing, challenges such as driver shortages, supply chain disruptions, and rising claims costs related to accidents and cargo theft continue to put pressure on the market.
Given the potential for tighter capacity in certain trucking sectors, brokers should recommend diversifying coverage options. This could involve combining primary and excess policies for comprehensive protection, particularly for high-value cargo or operations deemed high-risk. Brokers also need to provide detailed client information, including fleet safety records, driver histories, and loss records. The more comprehensive the information provided, the better the chances of securing competitive coverage. Additionally, businesses that adopt risk management strategies, such as implementing advanced tracking technology and safety protocols, will find it easier to obtain favorable coverage.
Burns & Wilcox offers exclusive insurance products not available from other managing general agents, addressing unique risks that standard policies may overlook. Our comprehensive coverage options include higher limits for Motor Truck Cargo, Automobile Physical Damage, Load Broker Liability, and Freight Forwarders Errors & Omissions. We are also the Canadian distributor for Loadsure, where single-load coverage can be purchased online and on-demand.
With deep industry expertise and a commitment to exceptional customer service, the Transportation experts at Burns & Wilcox provide tailored solutions and prompt, personalized support to address the unique challenges faced by trucking companies of all sizes, from single-unit operators to large fleets.
Contributor: Fernando Batitsta Manager Transportation
Burns & Wilcox
Toronto, ON
LONDON MARKET UPDATE
Contributors:
Paul Greensmith Chief Executive Officer
H.W.
Kaufman Group
London London, UK
James Stevenson
Executive Chairman
H.W. Kaufman Group London London, UK
Building Strategic Resilience for 2025’s Evolving Landscape
Last year proved to be another profitable period for (re)insurers, with companies continuing to uphold robust balance sheets despite the challenges posed by several major hurricanes making landfall. The strategic structural changes implemented in reinsurance programs during the hard market have provided a solid foundation, fostering further confidence in the industry. These adjustments have helped mitigate risk and set the stage for continued stability and profitability.
As we look to 2025, the January reinsurance renewals have signaled a notable shift towards a softening pricing environment for portfolios that have remained largely unaffected by these catastrophic events. Early indications suggest a 10% to 15% reduction in catastrophe pricing, with placements being oversubscribed. For accounts impacted by losses, renewals have generally remained flat or have seen modest increases, reflecting the nuanced dynamics of the market.
Furthermore, they have successfully defended their retention levels, aiming to safeguard against additional catastrophe losses and exhibit greater pricing flexibility than anticipated. As a result, insurers’ balance sheets remain resilient, earnings are being reinvested, and additional capital is gradually flowing back into the market.
Casualty treaty programs have remained largely stable despite ongoing concerns regarding pricing adequacy that have pervaded discussions over recent years. However, new programs or products that lack loss experience or those potentially exposed to the risk of nuclear verdicts continue to attract heightened scrutiny. This caution indicates the evolving risk landscape and the industry’s commitment to prudently managing its exposure.
Carriers are now facing the delicate balance of pursuing growth while preserving underlying profitability.
Carriers are now facing the delicate balance of pursuing growth while preserving underlying profitability. The recent wildfires in California are a reminder that significant events occur outside of the wind season. The impact of the reinsurance renewals and softening of rates is filtering down to direct and facultative placements; rates are trending downward, deductibles remain stable, and general levels of price adequacy remain strong. This combination of factors has fueled an atmosphere of optimism within the market, even amid ongoing geopolitical uncertainties.
In the London/Lloyd’s market, there continues to be investment in digital trading, analytics, and more efficient methods of providing follow market capacity. This is partially driven by an expectation that rates and profit margins will come under increasing pressure as market pricing gradually recedes from the recent highs.
The industry’s capacity for adaptability and resilience continues to underpin its longterm outlook, ensuring that it remains well-positioned to navigate the complexities of the global risk environment.
CONCLUSION
Contributor:
Paul G. Smith
Corporate Senior Vice President
H.W. Kaufman Group New York, NY
Click here for contact details >>
The growth of E&S will remain robust in 2025; however, it is tamped slightly from its aforementioned circa 20 percernt growth of recent years. We do not anticipate a shift from non-admitted back to admitted as insurers and insureds are generally becoming more comfortable with E&S placements. E&S will continue to have an advantage in providing bespoke terms, conditions, and rating mechanisms for specialized lines such as healthcare, transportation, and other professional service sectors.
There is widespread belief that the P&C sector will eventually soften, lending more importance to such trends as enhanced specialization, innovation, advanced technology, and integrated ownership structures, according to Conning.
Specialized sectors generally come with higher risk. For example, healthcare entities are under the constant threat of significant lawsuits, some of which may have resulted in serious injury or death. The same can be said for the transportation sector, where significant vehicle and truck accidents have attracted plaintiff bar action and runaway jury verdicts. These and other specialized sectors will continue to need the benefits provided by non-admitted markets even as E&S is further normalized within the industry
Of course, what no one can predict is the quantity or severity of extreme CAT events. Greater access to technology and data, and more attention to risk mitigation can help both carriers and clients. Having a partner like Burns & Wilcox to lean on during such challenging times is the best approach to addressing such market challenges.
Disclaimer: The above information has been prepared solely for the purpose of sharing general information regarding insurance and business practice management issues. These are just our opinions and are not intended to constitute legal advice or a determination on issues of coverage.
