Navigating a Shifting Insurance Landscape in 2025

Dear Valued Clients and Partners,

As we close out the first half of 2025, Union Risk Services would like to share a comprehensive update on the current state of the commercial insurance market. The year so far has been defined by continued hard market conditions, carrier scrutiny on risk selection, and increasing demand for alternative risk strategies. Below is an industry-by-industry snapshot of what we’re seeing on the ground, informed by both carrier movements and client experiences across the country.

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 Construction

Rates remain elevated across most lines, particularly for general liability, excess/umbrella, and auto liability. Underwriters continue to focus on contractors’ safety records, subcontractor controls, and project locations. Carriers have pulled back capacity in tougher jurisdictions like New York, California, and Florida, often requiring layered placements or higher retentions. Wrap-up programs and OCIPs are being more rigorously scrutinized, especially in multi-family or high-rise projects.

• Premium Trends: Increases of 10–20% for general liability and excess are common. Auto remains a pain point, with 15–25% hikes driven by nuclear verdicts and repair inflation.

• Underwriting Notes: Carriers are favoring firms with robust safety programs, telematics adoption, and proactive claims management.

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 Transportation

The commercial auto segment remains among the most challenging in the market. Fleet operators are seeing continued premium increases due to social inflation, rising jury awards, and parts/labor costs. Carriers are exiting certain classes of business, especially in urban trucking and non-emergency medical transportation (NEMT).

• Premium Trends: Long-haul trucking is experiencing 15–30% premium growth. Urban delivery and NEMT are being repriced or non-renewed unless loss control is exceptional.

• Underwriting Focus: Expect tighter guidelines on driver experience, vehicle maintenance, and GPS/telematics usage. Fleets with losses in excess of $250,000 are finding fewer willing markets.

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 Real Estate

The real estate sector continues to face headwinds on both property and liability lines. Property insurance is being driven by rising reinsurance costs, CAT modeling changes, and inflation-driven replacement values. Liability coverage—especially for multi-family habitational—has seen sharp price increases in markets like New York, Florida, and Texas.

• Premium Trends: CAT-exposed property rates are up 20–40% depending on location and construction type. Liability for habitational risk is rising 10–25% with tougher exclusions for assault & battery and mold.

• Carrier Behavior: Some carriers are tightening or exiting urban multi-family markets altogether, requiring layered programs or creative placements.

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 Manufacturing

Manufacturers are experiencing moderate rate increases, with property lines most affected by high valuations and supply chain delays impacting loss severity. Product liability and recall coverage remains steady but is tightening for certain classes (food, medical device, chemical).

• Premium Trends: Property rates are up 10–20%, driven by valuation corrections and inflation. Product liability remains stable for clean risks but can rise 10–15% in higher hazard industries.

• Underwriting Scrutiny: Focus on machinery maintenance, fire protection, and geographic concentration of facilities.

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 Private Equity

Private equity-owned portfolio companies are under increasing pressure to manage insurance costs amidst rising premiums and tighter underwriting. Carriers are more sensitive to roll-up structures and aggressive acquisition strategies. Representations and warranties (R&W) insurance pricing has stabilized slightly after record highs in 2022–23, but coverage terms remain narrow.

• Premium Trends: General increases across all P&C lines in PE-backed firms, with D&O and R&W coverage up 10–15% on renewals.

• Strategic Note: More PE firms are exploring group captives and agency captives to create enterprise-wide efficiency, especially in verticals like manufacturing, construction, and logistics.

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 Market Trends & Forecast

• Inflation & Reinsurance: Reinsurance renewals in January 2025 brought modest relief in pricing but not enough to ease pressure on primary carriers. Social inflation and litigation trends remain a long-term concern.

• Capacity Constraints: Capacity is returning in some areas, but carriers remain selective. Expect continued underwriting discipline throughout the rest of 2025.

• Alternative Risk: Larger middle-market firms are increasingly evaluating captives, risk retention groups (RRGs), and large deductible programs to offset market volatility.

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At Union Risk Services, we remain committed to helping our clients navigate this complex market—whether through traditional placements or custom-built alternative risk solutions. If you’d like to discuss your current program or explore new strategies for the remainder of 2025 and beyond, we’re here to help.

Let’s connect and strategize a better approach.

Stay safe and prosperous!