Despite macroeconomic headwinds, strategic buying opportunities are in-play

Rhea-AI Summary

WTW's latest Insurance Marketplace Realities report reveals favorable conditions for insurance buyers in 2025, despite macroeconomic challenges. With U.S. policyholder surplus exceeding $1 trillion and global reinsurance capital over $700 billion, the market shows historic financial strength. Insurance carriers are adopting growth strategies as rates stabilize, leading to competitive pricing and broader underwriting appetites. The report includes detailed price predictions across various insurance segments, with notable trends in cyber (-5% to +5%), property (CAT-exposed: -10% to +10%), and auto (+10% to +20%). WTW's 'Gemini auto-follow facility' and new market entrants are providing innovative solutions for buyers. The company maintains a bullish outlook on 2025 market opportunities, emphasizing that well-prepared buyers with strong broker relationships are best positioned to benefit from current conditions.

Positive

• Historic financial strength with U.S. policyholder surplus exceeding $1 trillion
• Increased market capacity and competitive pricing environment
• Broader underwriting appetites from insurance carriers
• Introduction of innovative solutions like Gemini auto-follow facility
• Favorable conditions for buyers to negotiate better terms and coverage

Negative

• Macroeconomic headwinds including renewed supply chain challenges
• Unpredictable tariffs affecting market stability
• Volatile financial markets creating uncertainty
• Social inflation impacting insurance costs
• Significant rate increases in auto insurance (+10% to +20%)

Capacity is operating at a surplus in most lines of commercial insurance

NEW YORK, May 02, 2025 (GLOBE NEWSWIRE) -- According to the latest Insurance Marketplace Realities report from Willis, a WTW business (Nasdaq: WTW), the current market environment offers opportunities for well-prepared buyers to secure favorable terms, broaden coverage options, and to re-engage in strategic risk transfer decisions that may have been a bit constrained in recent years. While this points to a buyers’ market, there are meaningful macroeconomic headwinds including renewed supply chain challenges, unpredictable tariffs, volatile financial markets, and social inflation.

With policyholder surplus in the U.S. exceeding $1 trillion and global reinsurance capital surpassing $700 billion, the commercial insurance market is operating from a position of historic financial strength. Insurance carriers are pursuing growth strategies on the belief that rate adequacy has largely stabilized, prompting broader underwriting appetites and more competitive pricing.

“Buyers are finding more negotiating power and flexibility in today’s market,” said Jon Drummond, Head of Broking North America at Willis. “It’s a moment to reassess strategies, re-engage in broader risk financing strategies, and secure the coverage depth, or other program enhancements, that may have been limited during the hard market cycle.”

A standout in this evolving landscape is the increased capacity – even constrained sectors like excess casualty have recently seen a modest introduction of new capacity. New market entrants and innovative solutions like Willis’ ‘Gemini auto-follow facility’ are providing significant options for buyers to build effective programs and mitigate emerging risks.

WTW’s latest Marketplace Realities Report also features expert insights from Sam Harrison, Chief Underwriting Officer at Canopius, in a "View from the Top", and also debuts a new policy wordings segment: “The Power of Clarity – Tariffs and Property Coverage,” where Helen Campbell, Head of Property Wordings for North America, explores critical clauses affected by tariff-related risks.

Willis is bullish on market opportunities stemming from ample capital, growing capacity, and renewed competition, and believes that this signals a healthy buyer’s market in 2025. Well-prepared buyers who clearly communicate risks, while leveraging strong brokerage relationships, are best positioned to benefit from the current market.

Key Price Predictions for 2025
Property
CAT-exposed	-10% to +10%
Non-CAT exposed	-5% to +5%
Domestic casualty
General liability	+2% to +8%
Umbrella (high hazard)	+10% to +15%
Umbrella (low hazard)	+7.5% to +12.5%
Excess (high hazard)	+7.5% to +15%
Excess (low hazard)	+5% to +12%
Workers’ compensation	–5% to +2%
Auto	+10% to +20%
International	Flat
Executive risks
Directors’ and officers’ public company (primary)	-3% to Flat
Directors’ and officers’ private / not-for-profit (overall)	-10% to Flat
Side A / DIC	-3% to Flat
Errors and omissions (large law firms)	+2% to +8%
Employment practices liability (primary)	Flat to +5%
Fiduciary (financial institutions)	-5% to + 5%
Cyber
Cyber	-5% to +5%
Political risk*
Low to Moderate Hazard Risks	Flat to + 20%
Terrorism and political violence
Terrorism and sabotage	-10% to -2.5%
Political violence	-5% to +5%
* China-related political risk rates at 50%+

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com.

Media Contact

Douglas Menelly; Douglas.Menelly@wtwco.com, +1 (516) 972 0380

Arnelle Sullivan; Arnelle.Sullivan@wtwco.com, +1 (718) 208-0474

FAQ

What are WTW's insurance price predictions for 2025?

WTW predicts varied price changes across segments: CAT-exposed property (-10% to +10%), cyber (-5% to +5%), auto (+10% to +20%), and D&O public company (-3% to Flat). Most segments show moderate adjustments, with auto insurance seeing the highest increases.

How much is the current policyholder surplus in the U.S. insurance market?

According to WTW's report, the U.S. policyholder surplus exceeds $1 trillion, while global reinsurance capital surpasses $700 billion, indicating historic financial strength in the commercial insurance market.

What are the main challenges facing the insurance market in 2025 according to WTW?

The main challenges include renewed supply chain issues, unpredictable tariffs, volatile financial markets, and social inflation, despite overall favorable market conditions for buyers.

What is WTW's Gemini auto-follow facility?

The Gemini auto-follow facility is WTW's innovative solution that provides additional options for buyers to build effective insurance programs and mitigate emerging risks in the current market.

How is the cyber insurance market trending in 2025 according to WTW?

WTW's report indicates that cyber insurance rates are expected to range from -5% to +5% in 2025, showing relative stability in this segment.