As we close out the first quarter of 2025, we wanted to share key trends and developments in the commercial insurance market—and what they mean for businesses in Transportation, Construction, Real Estate, Manufacturing, and Private Equity.

At Union Risk, we continue to help clients navigate a dynamic insurance landscape and make smart risk decisions that protect their bottom line.

Market Overview

Q1 saw continued hardening in certain lines—particularly Auto Liability and Umbrella coverage—while other lines began to show signs of softening as competition increased. Captives and alternative risk strategies continue to gain traction as business owners look for control, transparency, and long-term savings.

Source: AM Best Q1 2025 Outlook

Transportation

Fleet-heavy businesses are still grappling with high premiums due to nuclear verdicts and rising claims severity. Insurers remain cautious, and many are tightening underwriting standards. However, companies with strong safety programs and the right data are leveraging captive insurance structures to gain rate stability and recapture underwriting profit.

Source: FleetOwner: Insurance Market Trends Q1 2025

Construction

Worker’s compensation and general liability remain stable in most regions, but New York continues to experience higher rates due to labor law claims. Captives are becoming an attractive option for middle-market contractors looking to control costs and differentiate themselves in bids.

Source: Construction Dive: Insurance Trends 2025

Real Estate

Property insurance saw another round of rate increases in catastrophe-prone areas, particularly in multifamily and commercial buildings. Valuations and replacement cost discrepancies continue to challenge the market. Risk mitigation and tailored policy structures are key for property owners.

Source: National Real Estate Investor: Q1 Insurance Impact

Manufacturing

Supply chain disruptions and cyber threats remain top concerns. As manufacturers digitize operations, carriers are placing more emphasis on cybersecurity controls. Captive programs are helping manufacturers finance risk more efficiently and keep coverage tailored to their operations.

Source: Insurance Journal: Manufacturing & Cyber Risk

Private Equity

PE firms are increasingly leveraging group captive programs to reduce portfolio company insurance spend and improve EBITDA. Risk centralization and data aggregation are becoming standard practice to enhance purchasing power.

Source: Private Equity Wire: Risk Management & Insurance

Looking Ahead

The rest of 2025 may bring more market capacity and pricing stabilization—but volatility still exists. Businesses that proactively manage risk, especially through captives and alternative programs, will continue to outperform.

If you’re ready to take greater control of your insurance outcomes, our team is here to guide you.

Q1 2025 By the Numbers

Here are some quick insights that shaped the commercial insurance market this quarter:

• Commercial auto rates increased an average of 7.5% nationwide.

• Umbrella liability premiums rose by 10% on average for companies with high fleet exposure.

• Cyber insurance premiums increased by 4.2%, but with broader coverage terms as competition returned.

• Workers’ compensation rates stayed relatively flat, with a 0.7% average decrease nationally.

• Construction GL premiums in New York rose 12% due to ongoing labor law litigation.

• CAT-exposed property accounts saw rate hikes between 8% and 15%, depending on loss history.

• Captive formation was up 18% year-over-year, driven by interest from middle-market companies.

• Reinsurance costs continued to stabilize after 2024’s spike, with most lines seeing flat to 3% increases.

• Private equity portfolio companies saved an estimated 12-18% on total insurance spend when entering group captive programs.

• Underwriting profitability improved in the P&C sector, with a combined ratio of 98.3% across all lines.

Sources: Marsh Q1 Market Index, Business Insurance Q1 Summary, Aon Global Market Insights

Interested in Turning your company’s insurance expense into an insurance asset? Schedule a consultation.