Insurance Marketplace Realities 2025 – Personal lines

Rate predictions: Personal lines

	Trend	Range
United States
Homes		+15% to +20%
Cat-exposed homes		+50% to +100% with limitation or non-renewal
Cat-exposed homes with losses		+100% or non-renewal
Auto		+15% to +25%
Personal umbrella liability		+20% to 25%
Canada
Homes		+8% to +20%
Cat-exposed homes		+30% w/ limitations or non-renewal
Hard to place risks		non-renewal and limited markets
Auto		+6% to +10%
Personal Liability		+1% to +2%

Homeowners continue to be impacted by climate change

Carriers continue to struggle with frequent and severe weather events, such as hurricanes, wildfires, floods. Now they are also trying to understand the impacts of convective storms. Convective storms, which include such severe weather events as thunderstorms, hailstorms and tornadoes, have been impacting the personal insurance market in several ways:

• Increased claims and costs: Convective storms can cause significant property damage due to high winds, hail and flooding.
• Rising premiums: Higher premiums are needed to offset the increased risk and financial losses.
• Coverage restrictions: Insurers are adjusting their coverage terms in response to rising risks. This could mean higher deductibles, reduced coverage limits, or even limiting roof coverage as a response to the rising frequency and severity of storms, including convective storms such as hailstorms and high winds.

The reliance on surplus lines continues to grow as the demand for solutions in high-risk areas expands

• Reinsurance along with alternative capital has stabilized for now, helping provide additional capacity, especially in surplus lines.
• Admitted carriers will continue to shy away from CAT-prone areas leaving many clients dependent on alternative markets through surplus lines wholesalers.
• Non-admitted carriers are still taking significant rate while eliminating coverages usually included by the admitted market.
• More standard carriers are creating non-admitted solutions to address capacity issues and coverage concerns and are starting to market these options more aggressively.

Personal auto premiums appear to continue to trend upward

• Frequency and severity of auto-claims are still a problem that needs to be addressed beyond simply raising rates. Changes in driving habits through real-time monitoring of drivers is one way to address this problem by rewarding responsible, safe drivers with lower premiums.
• Large auto liability losses and outsized settlements are still a significant concern.
• A car theft crisis continues to impact Canada and the U.S.
• The rise of advanced safety features in vehicles, such as automatic emergency breaking, lane assistance, adaptive cruise control can lead to fewer accidents. However, the high cost of these technologies can increase repair costs, impacting insurance pricing.
• Electric vehicles have different risk profiles and repair costs compared to traditional vehicles, and insurers are developing new models to accommodate the unique characteristics of autonomous vehicles.

Personal umbrella liability pricing accelerates; underwriting tightens

• Carriers are very concerned with outsized settlements due to social inflation.
• The rising severity of liability claims, including large settlements and judgements, is driving up premiums.
• Automobile liability losses continue to put a strain on limits being offered and pricing increases.
• Social media and online activities have introduced new liability risks, such as defamation and privacy breaches.

Disclaimer

Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).

Contact

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Despina Buganski

Head of North America Personal Lines

email Email phone +1 860 930 0557

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