Overall
At the end of 2024, the commercial insurance market showed continued but moderate premium growth, with an average increase of 5.4% across all account sizes, similar to Q3’s 5.1% and Q2’s 5.2%. Medium-sized accounts experienced the highest increase at 6.4%, while small-sized accounts saw the lowest at 3.6%. Despite some reported challenges such as limited underwriting capacity and additional carrier requirements, insurers largely indicated no material change in underwriting practices. Appetite for small business insurance remained strong, suggesting a stable market environment.
Looking at historical trends, premiums have been increasing for 29 consecutive quarters, though at a more controlled pace compared to past decades. As the graph highlights, current increases are notable, yet they are far from the sharp spikes seen in the early 2000s (e.g., Q4 2001 peak at 28.5%). Compared to Q4 2023, premium growth has slowed, particularly for small-sized accounts, which saw a drop from 6.7% to 3.6%.
Overall, the market remains stable, with gradual premium adjustments rather than drastic fluctuations, indicating a balanced insurance landscape heading into 2025.
By Line of Business
In Q4 2024, premium pricing trends remained consistent with earlier quarters, with an average increase of 5.4% across all major lines of business. While some lines such as D&O, cyber, and workers’ compensation, continued to see pricing declines, others experienced notable increases driving the overall average. Commercial property premiums rose by 6.0%, down from 7.9% in Q3 and 11.8% in Q4 2023, indicating potential stabilization. However, challenges persist, with insurers reportedly requiring higher deductibles for fire, wind, and hail risks, as well as more layered coverage programs to mitigate exposure. Meanwhile, commercial auto premium increases grew to 8.9% in Q4 despite a shrinking growth in each of the first three quarters in 2024. Following a similar trend, Umbrella rate growth peaked in Q3 of 2020 at 22.9% before shrinking to a 7.0% increase in Q1 2022. Umbrella insurance premium increases grew to 8.7% in Q4 2024, reflecting continued market pressures.
Among specific lines, cyber insurance recorded a record-low rate change of -1.8%, as increased underwriting capacity and competition continued to drive rates down. Other lines like business interruption (3.2%), broker E&O (2.0%), and medical malpractice (1.3%) saw moderate increases, while general liability rose by 5.3%. Higher-risk lines such as construction (3.8%) and marine (2.2%) also saw rate hikes, highlighting ongoing underwriting caution in these sectors. The commercial auto market saw it’s 54th consecutive quarter of premium increases, reflecting the persistent upward trend driven by exposure to increase claim frequency and severity. However, some stabilization in key areas (e.g. property and cyber) suggests that pricing adjustments may be moderating heading into 2025.
