P&C Insurance Outlook: Rate Moderation Mixed With Emerging Risks

Deerfield, IL (December 12, 2024) — Alera Group’s fifth annual Property and Casualty Market Outlook offers a comprehensive view of 2025 market conditions, highlighting stabilizing rates across many insurance lines and the growing complexity of emerging risks. The report points to a more stable insurance environment for buyers, particularly in Cyber Liability, Directors and Officers Liability (D&O), and Workers’ Compensation, while issues such as social inflation, extreme weather and novel liabilities tied to artificial intelligence (AI) and PFAs (“forever chemicals”) present new challenges.

As one of the nation’s top independent insurance and wealth services firms, Alera Group provides these annual insights to help businesses navigate the evolving insurance market. The report outlines key trends and offers strategic guidance for buyers managing risks in a rapidly changing landscape.

Key highlights from the 2025 P&C Market Outlook:

• Rates stabilizing: While rates are moderating for many lines, buyers of Commercial Auto, Umbrella/Excess Liability and personal lines of insurance coverage will see the highest increases (10–15%). Rates for Employment Practices Liability and Workers’ Compensation are expected to remain flat or decrease.
• Emerging risks reshaping liability: PFAs, or "forever chemicals," are projected to become an $80 billion issue for insurers, with the potential to exceed $200 billion in total costs. Meanwhile, AI development introduces unpredictable liabilities as businesses work to balance innovation with risk mitigation.
• Evolving capacity: Capacity is expected to remain the same as in 2024 for all lines, although Excess Insurance layers may be difficult to obtain for higher-hazard classifications. 
• Social inflation pressures: Large jury awards, third-party litigation funding and anti-corporate sentiment continue to drive higher liability premiums, resulting in a 7% growth in claims during the past year.

“The 2025 Property and Casualty Market Outlook highlights some welcome stability in rates, but it also shines a spotlight on the new challenges businesses face, such as PFAs and AI liability,” said Mark Englert, Executive Vice President and P&C Practice Leader at Alera Group. “This year is all about staying ahead of these changes — whether that’s addressing emerging issues or finding smarter ways to manage traditional risks. At Alera Group, we’re here to help clients navigate the complexities and make the most of the opportunities ahead.”

The full 2025 P&C Market Outlook report, based on collaborative efforts with industry partners and experts, is available for download on the Alera Group website. For inquiries, contact a local Alera Group office or email info@aleragroup.com.