Commercial insurance rates in the US continued their upward trajectory in the first quarter of 2025, with the composite rate rising by 3%.
Richard Kerr, CEO of Novatae Risk Group, highlighted that umbrella and excess liability coverage, along with commercial auto, saw the most significant increases, both climbing by 6.7%.
The transportation sector experienced the largest premium hikes, with rates rising by 6% due to ongoing underwriting concerns and pressures in the market.
The data, compiled by the Risk & Insurance Alliance, offers insights into the evolving insurance landscape. The first quarter saw significant shifts across various coverage classes, industries, and account sizes.
Commercial property insurance premiums rose by 3.6%, with business interruption coverage seeing a similar increase of 3.6%. Business owner’s policies (BOP) saw a 3% rise, and inland marine coverage increased by 1.67%. General liability premiums climbed by 2.3%, while umbrella/excess liability and commercial auto rates both saw substantial increases of 6.7%. Workers’ compensation remained unchanged at 0%, while professional liability increased by 1.3%, and directors and officers (D&O) liability saw a 1% rise. Employment practices liability (EPLI), fiduciary insurance, crime insurance, and surety bonds all saw a 1.3% increase. Cyber liability premiums rose by 1.7%.
By account size, small accounts (up to $25,000) experienced the largest increase, rising by 4.7%. Medium accounts, ranging from $25,001 to $250,000, saw a 3.7% increase, while large accounts ($250,001 to $1 million) climbed by 3%. Jumbo accounts (over $1 million) experienced a more modest increase of 2.3%.
The data also reflected notable trends across industry sectors. Manufacturing premiums increased by 3%, while contracting saw a rise of 2.7%, and service premiums climbed by 3%. Habitational insurance rose by 4.7%, with public entity premiums increasing by 1.7%. Transportation, however, faced the highest increase of 6%, while energy premiums grew by 2.3%.
In the personal insurance market, rates also continued to climb in the first quarter of 2025, with the composite rate reaching 4.9%, up from 4.0% in the previous quarter. Homeowners’ insurance premiums led the rise, particularly for high-value properties. Policies for homes valued over $1 million rose by 7.3%, while those under $1 million increased by 4%. Kerr attributed these increases to the lingering effects of recent California wildfires, adding that further hikes could occur as hurricane season approaches. Personal articles and fine art insurance also saw a notable increase, rising from 2.3% to 4.3%.
MarketScout, a division of Novatae Risk Group, compiled the data.
