Property insurance market continues to grow more competitive
Expected range for rate changes next quarter1
1Note: Rate ranges presented here reflect expected renewal outcomes — as of the Lockton Market Update publication date — over the next quarter for most insurance buyers. These should not be taken as a guarantee of any specific results during renewal negotiations. Depending on risk profiles, loss histories, account specifics, and other factors, individual buyers may renew their programs outside these ranges.
Property insurance market conditions continue to improve for most buyers. In the fourth quarter of 2024, median property rates rose 1.1%, according to Lockton data (see Figure 6).
Although inflation and climate change continue to drive up exposures, they have not deterred competition. Commercial property insurers are actively defending their existing portfolios while also pursuing growth opportunities. In addition to improving pricing, buyers can generally secure more favorable terms and conditions, reducing instances of nonconcurrencies.
Notably, shared and layered placements remain more competitive than single-carrier placements; during the hard market cycle, rates for shared and layered programs rose more than rates for single-carrier placements, which means rate relief in the current environment is more significant for these programs. Oversubscription, however, is common, creating challenges for buyers, which must balance long-term insurer relationships against emerging market opportunities. Several carriers continue to pursue middle market opportunities, resulting in competitive conditions for that space.
Natural catastrophes generated $140 billion in insured losses in 2024, according to Munich Re. Hurricanes Helene and Milton were considered near-misses that, in a worst-case scenario, could have significantly added to this total.
The southern California wildfires in early 2025 — projected to cost insurers an estimated $30 billion to $50 billion, according to Dowling & Partners — are viewed as a potential earnings rather than capital event, and personal lines are expected to be hit harder than commercial property. However, their ultimate impact on the market remains uncertain, and much depends on how the rest of the year progresses.
As expected, January 1, 2025, reinsurance treaty renewals proceeded in an orderly manner. As firm order terms neared their effective dates, pricing continued to improve for profitable buyers. Attachment points secured by reinsurers in 2023 largely held, with most negotiations focused on pricing relief. Looking ahead, June 1, 2025, treaty renewals for Florida insurers are expected to favor buyers.
