Property rates forecast to soften in 2025: Amwins

Despite pending losses from Hurricanes Helene and Milton, and severe convective storms, property insurance rates are expected to soften in 2025, Amwins Group Inc. said in a report Thursday.

But current rate hikes in the casualty market are here to stay, driven by social inflation and litigation trends, Amwins said.

Fresh capacity is entering the property market, forcing existing markets to become more flexible with their pricing and overall appetites, according to Amwins’ State of the Market 2025 Outlook.

Many insurers have increased their line sizes, making layered and shared deals easier to place.

The combination of Helene and Milton may impact the market next year. Still, for now, Amwins views the 2024 hurricane season as “an earnings event, rather than a balance sheet event for the vast majority of carriers.”

Reinsurance rates also remain stable, though attachment points and event definitions are tightening, Amwins said.

The back-to-back hurricanes will have a “muted impact” on reinsurers, likely strengthening their resolve around retention levels.

“While not expected to raise rates, any potential market reductions are expected to slow,” Amwins said in the report.

In the casualty market, rates will increase, particularly in excess casualty, as social inflation and litigation trends remain significant concerns.

Retailers should brace for “a more aggressive push in primary rate increases over the next 12 months,” Amwins said, adding: “We expect to see primary rate increases hit double digits in 2025 as capacity continues to focus more on excess rather than primary coverages.”