February 19, 2025
The commercial insurance market continues to evolve in 2025, reshaping how carriers assess risk and how brokers structure coverage solutions for their clients.
Here are some of the trends and changes that I found interesting.
Reinsurance and Premium Trends
Reinsurance indicators continue to play out on renewals.
Property insurance premiums for most CRE portfolios are decreasing.
General liability premiums are increasing, often by double digits percentages, at renewal.
General Liability Coverage Changes
Whilst General Liability is an overall small % of premiums for many CRE owners, carriers are also continuing to have increased underwriting scrutiny and reductions in coverage.
Some of these reductions in coverage are significant and can have a material impact in potential balance sheet risk from uncovered claims.
Some examples to look out for:
- A&B exclusions
- A&M exclusions
- Firearms exclusions
- Animal liability exclusions
These exclusions are most commonly impacting multifamily owners but can be an issue for other asset classes as well.
Warehouse and Industrial Asset Approach
There continues to be a bifurcation in how underwriters approach warehouse and industrial assets, with a strong focus on tenancy and public exposure (e.g., a manufacturing facility vs. a trampoline park).
International Market Engagement
On larger portfolios, London & Bermuda are attaching to lower towers than we’ve seen in the past.
Data Quality and Risk Assessment
Data availability and quality will continue to be a critical differentiator in outcomes.
Best in class operators (from an underwriting/RM perspective) are adding detail to SOVs.
Beyond standard information like most recent update years for major building systems (wiring, HVAC, roofing, plumbing), detail like type of wiring, type of electrical panel, and type of roof materials are becoming more important.
Carriers and brokers are continuing to utilize more risk analytics and location specific analytics to assess potential risk.
Potential high risk factors like wildfire score & crime score are location linked vs. based on a general area or zip code, etc.
Conclusion
‘The story’ is more important than ever.
At scale, capacity re-entering the property market gives some relief.
However, the ability to articulate how one operator approaches capex, risk mitigation, and other factors compared to peers is still leading to differentiated outcomes.
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