Market Begins to Soften, Yet Auto and Umbrella Pain Points Persist
At the close of Q1, a noticeable shift towards moderation became apparent in the property & casualty market. After a few consecutive quarters with sustained hard market conditions, premium increases are finally showing signs of slowing across multiple key lines. However, this is a far cry from a widespread market softening, as auto and umbrella remain two of the most persistent pain points for buyers.
Auto and Umbrella: Still on the Rise
The most pressing changes continue to stem from the auto and umbrella markets. Nuclear verdicts continue to increase while being fueled by third-party litigation funding. With claims hitting the umbrella layer, carriers are reducing capacity and being more selective with their appetite. Where clients were once able to produce a $25 million umbrella program through one or two carriers, they now may need three or more to provide coverage at a potentially higher price point, especially if they have a heavy fleet exposure.
Management Liability: A Calm During the Storm
On the other hand, we see rate decreases for D&O, cyber, and EPLI coverages—a change of pace from the previous years of steep hikes. In cyber specifically, clients with stronger controls and clean loss histories now see better pricing and occasionally enhanced coverage. After a volatile stretch of time, cyber is witnessing a period of stabilization. Those clients who have invested in risk mitigation may be rewarded by their underwriters.
Wind/Hail Deductible Buy-Downs: Increases on the Horizon
Another trend gaining traction, particularly in the Midwest, is the increase in wind and hail deductible buy-downs. Historically, these were hardly seen in the Midwest, but due to a series of storms and hail events, carriers are imposing higher percentage deductibles. As a result, more clients are exploring buy-down policies to try to regain some financial predictability on the property side.
Tariffs: A Growing Concern Under the Radar
Although not yet evident in our findings, tariffs are an emerging issue, particularly for manufacturers and distributors. Uncertainty about evolving tariff increases and policy changes is deeply impacting planning and procurement, particularly for clients who rely on specialized equipment from overseas.
Final Takeaways
While parts of the market show early signs of softening, auto and umbrella coverage remain challenging, with no short-term relief in sight. Behind the scenes, clients and brokers alike are closely monitoring the ripple effects of global trade policy and how it will impact costs and valuations. Currently, Q1’s story remains one of gradual market softening with targeted friction, and the industry is still adapting to evolving risks, economic pressures, and dynamic claims.
