After years of rising premiums, the Q1 2025 commercial insurance market is showing signs of softening. According to the latest data from The Council of Insurance Agents & Brokers, average premium increases have slowed across most lines and account sizes. That’s welcome news for business owners who’ve been navigating relentless cost pressures.
But this isn’t a time to let your guard down.
Here’s what stood out this quarter and how it affects our clients in construction, contracting, and other high-risk industries:
Medium-Sized Businesses Are Seeing the Most Relief
Premium increases for mid-sized accounts dropped significantly—down to 3.7%, from 6.4% just last quarter. Why the shift? More carriers are stepping back into the middle market, bringing added competition and flexibility. We’re seeing this firsthand: markets that were cautious a year ago are now open to quoting and renewing flat for good risks.
Commercial Property Premiums Are Cooling
After years of steep hikes, commercial property premiums rose by just 2.9%—a major slowdown from the 6% jump in Q4 2024. Underwriters are showing more flexibility, and strong submissions are being rewarded with better terms. That said, property remains complex. If you’ve made improvements to your buildings or risk controls, now is the time to make sure your carrier knows it.
Auto and Umbrella Still Face Pressure
On the flip side, commercial auto and umbrella saw the steepest increases—10.4% and 9.5% on average. A major factor? The growing impact of third-party litigation funding. These arrangements can lead to larger verdicts and prolonged cases, pushing costs up for everyone.
What This Means for You
At Watkins, we’re cautiously optimistic but also realistic. The market may be softening in some areas, but underwriters are still scrutinizing submissions closely. That means documentation, safety protocols, and proactive communication matter more than ever.
If your renewal is coming up, let’s talk. We can assess how market shifts apply to your coverage, and where there may be room to negotiate stronger terms.
Insurance markets move in cycles, but good risk management is constant. Let’s make sure your policies work as hard as you do.
