After spending some time with the Council of Insurance Agents & Brokers’ Commercial Property/Casualty Market Report for Q4 2024, a few things stood out during a period when market conditions held and premiums rose roughly as they had the previous quarter. 

Here are our takeaways from the report.

Insurers continued to take corrective action to stabilize the overall property market, and we’re seeing that in a dip in Q4 premium increases—6% in Q4 2024 compared to 7.9% in Q3 2024 and 11.8% in Q4 2023.  

The following changes are impacting rate stabilization: 

Even though values have improved, we’re still seeing underwriters continue to scrutinize the adequacy of values because of broader economic factors such as inflation, supply chain constraints, and skilled labor shortages. For insureds, this means it’s the right time to talk with your insurance advisors and collaborate with your insurer partner to analyze values insured. 

Additionally, building conditions and protections are being heavily underwritten, meaning owners are making upgrades to qualify for insurance rather than to unlock savings.  

The fast-shifting and still relatively young cyber space may be leveling off after reactive shifts and quick growth. We saw cyber premiums fall by an average of 1.8% in Q4 2024, which is a record low for the line, but only slightly surpasses the previous record, a 1.7% decrease reported in Q2 2024.  

The downward pressure on premiums likely is due to greater underwriting capacity and competition among carriers for U.S. cyber business, as well as increased cyber resiliency—well-protected businesses can avoid the crushing expense a breach could otherwise present. 

The commercial auto insurance market faces challenges from nuclear verdicts, rising claims, driver shortages, and fleet electrification, leading to higher costs and premiums. Businesses, especially those with large fleets or poor loss histories, are experiencing significant rate hikes and limited coverage options. As the market evolves, policyholders must address emerging risks, like insuring electric vehicles, and adapt to changes in driver demographics and technology. The 2025 outlook indicates these challenges will continue, requiring businesses to adopt innovative risk management strategies.

Although January 1, 2025 casualty renewals saw more capacity and stability than projected, reinsurers are putting pressure on reserve adequacy and continue to obtain significant rate increases where necessary. We expect the 2025 casualty market to keep seeing rate and capacity challenges on tougher classes of business. 

We also expect to see more pressure with umbrella and excess liability placements. Carriers continue to reduce capacity on these placements while maintaining or increasing rates. In general, carriers are trying to reduce their exposure to highly litigious classes of business, such as heavy auto fleets, complex product liability, and challenged U.S. jurisdictions. 

Commercial auto and umbrella had the highest average increases in premiums out of all lines, at an average of 8.9% and 8.7%, respectively. According to a report by CBIZ on commercial auto market conditions, driver shortages, repair costs, and supply chain issues all drove up the frequency and severity of commercial auto claims in 2024—and a report by AM Best found the average loss per commercial liability claim has doubled since 2014.  

Increased claim frequency and severity mean increased premium costs. And the recent rise in fleet electrification can also bring higher premiums because electric vehicles carry a unique risk profile. It remains to be seen how the new administration’s pause in EV funding will affect the rate of electric vehicle adoption and associated premiums.  

For more risk management guidance, contact us today.