In its latest insights, The Baldwin Group has highlighted a divided commercial insurance landscape where property markets are showing signs of stability while litigation-exposed casualty lines remain under pressure.
According to the report, commercial property pricing has cooled significantly compared to last year, with the average trajectory dropping from 8.3% in Q2 2024 to 0% in Q2 2025. The report attributes the shift to increased reinsurance capacity during July 1 renewals, greater participation by managing general agencies (MGAs), and growth in the excess and surplus (E&S) market.
These factors have improved flexibility for challenging accounts, particularly those previously affected by catastrophe (CAT) risk pricing spikes. Larger CAT-exposed properties are now seeing notable risk-adjusted rate decreases year over year.
Matt Kashdin (pictured above), national director of client engagement at The Baldwin Group, says companies cannot afford to be passive in a market shaped by both volatility and opportunity.
“Businesses can unlock better terms, broader coverage, and strategic advantage by working with risk and insurance advisors who understand where the market is bending, not just where it’s been,” Kashdin said.
The report also points to CAT events as a test of market resilience early in 2025. January’s Los Angeles wildfires resulted in $45 billion in insured losses but did not destabilize property segments. Reinsurance renewals for excess of loss cover remained favorable, allowing the market to absorb the impact without significant disruption.
Global insurance data shows a wider trend of rate shifts beyond the US. According to Marsh's Global Insurance Market Index, commercial insurance rates worldwide declined by an average of 4% in Q2 2025. The Baldwin Group’s findings align with these global trends, indicating that buyers are beginning to benefit from market adjustments after several years of rate hardening.
At the same time, Novatae Risk Group data indicates that US commercial insurance rates overall rose by 2.8% in Q2 2025, down slightly from 3% in the previous quarter.
While this reflects a deceleration in increases, it highlights the continued variability across lines of business. Property rates are flattening or declining in certain sectors, but casualty lines remain firm or rising, particularly in excess liability and auto, consistent with Baldwin’s observations on litigation pressures.
Lockton’s recent Market Update also points to a generally stable US P&C market in 2025, though it warns of lingering uncertainty tied to claims inflation and broader economic conditions.
According to Lockton, insurers are balancing improved capacity and underwriting results with ongoing concerns about social inflation and systemic litigation risk. These factors continue to shape pricing in casualty and umbrella lines, where volatility has not abated.
In contrast, casualty lines are experiencing sustained upward pricing pressure. The Baldwin Group found that general liability rose 5.3% and commercial auto climbed 6.5% in Q2 2025, driven largely by litigation risks, large legal verdicts, and third-party litigation funding. Umbrella and excess liability lines recorded even steeper increases at 9.3%.
Cyber insurance remains competitive despite heightened risk exposure, with ransomware attacks and supply chain vulnerabilities prompting insurers to refine prevention-focused coverage options. Capacity is still abundant in this sector.
Management liability, including directors and officers (D&O) and employment practices liability (EPLI) coverage, is seeing strategic softening in pricing for financially sound and well-governed companies, although underwriting selectivity is increasing amid regulatory and economic pressures.
“Organizations that adopt forward-looking resilience strategies and partner collaboratively with risk and insurance advisors who can help provide guidance and strategies will be best positioned to leverage optimal program structures and pricing at renewal,” Kashdin said.
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