Digital Insurance reached out to insurance professionals for comments related to trends in property and casualty (P&C) insurance.
The use of technology, including artificial intelligence will expand in the P&C industry next year, the experts suggest. Insurers are likely to continue to prioritize customer experience. Climate change, including an increase in the severity and frequency of natural disasters, remains an ongoing concern.
Responses have been lightly edited for clarity.
Belen Tokarski, president and COO at Mylo
Consumer education is one of the biggest things I would like to see from carriers in 2025. We have been in a prolonged hardened market. While there are rumors of it softening, it won't happen overnight. In my opinion, there is still this massive gap between consumers and carriers. Consumers don't understand the reason behind the massive increase in insurance pricing, whereas carriers can better communicate the rationale, promote understanding, and foster additional customer retention strategies. The rise in pricing without education has people frenzied to change carriers and find cheaper solutions, which are not always the best to fit their unique coverage needs. Carriers looking to gain and retain clients should invest in transparent and proactive communications.
As carriers examine the businesses they are willing to underwrite, the E&S market is expected to grow. Therefore, I expect to see increased digital support for E&S lines.
Meredith Brogan, president at Crawford Network Solutions
Predictive modeling will play an increased role in flood preparation and response in 2025. Coming out of a year when we saw back-to-back hurricanes in the same location and widespread flooding in non-coastal communities, a growing awareness of flooding and its risks will accelerate the call for change in the P&C market. With property owners increasingly alert to the risks, predictive modeling and analytics will be increasingly leveraged to provide better opportunities for preparation and response. The use of AI models to predict climate patterns and extreme events will become more prevalent. As these AI-driven models get more precise, homeowners, business owners, and the industry at large will all gain a stronger understanding of the exposures and opportunities to mitigate their risk.
Ian Drysdale, CEO of One Inc
With an 82% projected increase of cashless payment volumes globally
Bill Pieroni, CEO of ACORD
The current hard market will likely slow, but continue for most geographies and lines of business. However, "rational" competition and the economic realities of P&C limit new entrants that past hard markets have generated. The industry will continue to experience challenges with underwriting emerging risks, and have limited appetite in high cat-prone areas, driving an even greater need for new AI-based modeling.
Garret Gray, president of global insurance solutions at CoreLogic
We will continue to see more collaboration between insurtech companies because it's the most effective way to address gaps within the property and restoration industries. No one company can do it all alone and working together to create the best digital integrations ultimately provides seamless customer experiences and better workflows. It sounds simple but is an effective strategy for a more connected ecosystem, allowing people to focus on people. Everybody wins.
Nakita Devlin, CEO and founder of Ric
Parametric insurance will likely see a major market expansion as it moves from the commercial sector into the consumer market. Start-ups and insurtechs are making this possible by using advanced technology and data to deliver parametric products that are affordable and accessible to individuals and small businesses. This shift not only meets growing demand for climate-responsive coverage but also benefits capacity providers by widening their pool of policyholders and diversifying risk across a broader base.
Troy Crawford, head of commercial lines product management at Westfield
In 2025, look for companies to get even tighter with terms and conditions concerning wind or hail damage and roof exposure. The significant property CAT losses, particularly in the Midwest, are driving insurers to explore new ways to help customers keep premiums affordable. This will include more focus on cosmetic damage exclusions and higher deductibles.
Geoffrey Lehv, VP and head of North American accounts, kWh Analytics
Documentation of resilience measures against natural catastrophe damage will become increasingly critical in 2025. Insurance carriers will require evidence of implemented best practices. Asset owners demonstrating effective risk mitigation will secure more favorable insurance pricing. This industry-wide advancement requires coordination between equipment manufacturers developing resilient solutions, researchers establishing standards, and asset owners implementing proven measures. When insureds share what works, it helps the whole industry get better at pricing risk.
Coleman Johnson, SVP and chief underwriting officer at The Mutual Group
I expect commercial property to remain stable and positive with continued focus on valuation and conservative cat management as the market stays cautious given our new normal for severe weather patterns. Liability rates should also remain stable with GL in low to mid-single digit, with excess rates higher with continued discipline holding for the most part on limits management, although some supported umbrella carriers will surgically put up higher limits on lighter GL exposures. However, adverse liability trends like social inflation show no signs of subsiding and I predict GL and excess rates will move north in the near future. With Auto remaining unprofitable, terms will stay firm with high single digit rate for light fleets and more for large or heavy fleets.
Personal lines homeowners and auto have made great strides with rates needed to adjust for elevated cat and auto liability loss trends. This needs to continue in 2025 but the outlook has improved.
Ken Hugendubler, Principal at Baker Tilly
M&A activity in insurance will accelerate in 2025, especially for mid-size carriers with an increasing interest from private equity in the sector. Mid-size carriers will look for M&A opportunities that will diversify geographies and products, help address succession planning and deliver the capital required to invest in technology, with a focus on artificial intelligence.
Insurance has seen a technology revolution for the last 15 years, largely accelerated by insurtech. Almost every insurance organization has recognized the need to automate manual processes and find ways to solve challenges surrounding unstructured data, but many don't have the capital to address these issues. We expect mid-size carriers to look for alternative ways to achieve technology goals, either through private equity or a merger.
Charlie Sidoti, executive director at InnSure
As extreme weather patterns worsen, catastrophe-related protection gaps will continue to increase, putting pressure on communities to improve their risk resiliency and seek out alternative self-insurance options. New insurance distribution models and solutions — like parametric insurance, embedded insurance, and group- or employer-based insurance — will proliferate in the market, and these options will help close the protection gap in innovative ways through novel underwriting approaches and flexible pricing and offerings.
Katie McGrath, CEO of North America at Swiss Re Corporate Solutions
With climate change-induced hazard intensification likely to increase losses in the future, mitigation and adaptation measures are key to reduce loss potential. To prioritize actions however, risk managers must first understand their risk and decide what risk to retain and what to transfer. To get this balance right is especially important in the current environment. A multinational utility company, for example, might need to identify which power generation assets are most exposed to natural hazards such as floods or storms to inform where they should focus efforts on mitigating risk and preventing losses. Here, advances in technology are key.
(These responses were shared with other publications)
Francois Ramette, principal in PwC's insurance advisory practice
P&C pricing has been softening in 2024, which is expected to continue in 2025. Prices by line, class, channel, and state/region can deviate—sometimes significantly—from the broader trend, and therefore insurers with the digital capabilities to track pricing more-timely and efficiently than their competitors at the required levels of dimensionality will continue to outperform in 2025.
Inflation—economic and social—is expected to persist in 2025, which will complicate the softer P&C pricing market described above as this is the first time in modern history that price softening is accompanied by inflated exposure bases and persistently rising claim values. Leading insurers are increasingly deploying advanced analytics across integrated data sets (i.e., internal data augmented with select external data sets) to inform their responses to this challenge.
The probability that natural catastrophes (nat cats) once again generate losses in excess of $100 billion in 2025 is significant due to the sustained effects of climate changes, inflated property values, and growing populations in nat cat-prone areas. These are well known complications, but their effects have been accentuated from secondary perils such as convective storms, floods and wildfires. Smaller insurers are particularly at risk of outsized losses given their inherently more concentrated (less diversified) books of business and lower levels of analytical capability.
Finally, P&C insurers are expected to continue to modernize their technology platform and develop artificial intelligence capabilities to more efficiently select and manage their risks through a more agile and scalable operating model.
Brian Patillo, EVP at Goosehead Insurance
As interest rates come down and housing picks up, 2025 will be an ideal time for homeowners to reassess their insurance costs to potentially save on overall mortgage payments.
Carriers will become more selective in underwriting, with increased scrutiny on property conditions such as roof state and proximity of tree limbs. The push for consumers to maintain their homes to prevent risks and potential policy cancellations will likely intensify, emphasizing the need for consumers to engage in loss prevention practices actively like installing water sensors or shut-off valves.
As carriers start to reopen for new agent appointments, we expect an increase in the number of agents joining the industry, as its appeal as a career option rises.
With severe weather events becoming more frequent and intense, clients and carriers alike will need to adjust to new industry standards in 2025. Carriers are revising their coverage for roofs and other property parts to mitigate financial risks associated with frequent, smaller-scale catastrophic moments. Payment schedules for roof damage may shift, with older roofs receiving less coverage due to wear and tear, moving away from the past practice of full replacement. Carriers are also starting to pursue strategies, where clients shoulder more of the risk, especially for home insurance. This will likely cause higher consumer out-of-pocket expenses for preventative measures against weather damage.
Lauren Menuey, managing director at Goosehead Insurance
The traditional tactic of bundling home and auto insurance has been a prevalent strategy in the past, though we anticipate this shifting in 2025 with fewer bundled options existing in states like California, Florida and Texas. Carriers that offer both home and auto may be open to writing monoline auto in 2025, however they will likely require customers to purchase auto to be eligible for home. This will limit home capacity with those carriers, which may lead clients and agents to seek alternative bundle options, such as splitting the bundle between carriers, with monoline Home carriers picking up more market share. -
In 2025, the E&S market for property insurance will expand, particularly in states with restrictive regulatory environments or heightened exposure to risks such as coastal areas or wildfire-prone regions. Even carriers that have historically not offered E&S may bring these products to the market as an alternative to meet evolving consumer needs.
Eric Benedict, senior associate at Clyde & Co, Atlanta
In 2025, we can expect a renewed push for statutory reforms in the commercial property insurance space in hurricane-prone states, which were severely impacted by the 2024 Atlantic Hurricane season. Both Florida and Louisiana recently enacted statutory reforms that are anticipated to shift the legal landscape from being more favorable to insureds toward a more insurer-friendly framework. Specifically, the reforms make recovery of attorneys' fees more difficult for policyholders who file suit against their insurers for first-party losses. These changes may decrease a policyholder's incentive to bring suit and lead to a decrease in the number of suits brought against insurers, with policyholder firms focusing their efforts on larger cases and those with a higher likelihood of recovery. These changes have led to criticism from policyholders and the policyholder's bar alike, so 2025 may bring renewed efforts to reverse these reforms in states that have enacted them and prevent enactment in states where reform may be on the horizon.
In states where similar statutory reforms have not been enacted or whose effective date has not yet passed, we can expect an uptick in property-related lawsuits being filed more quickly in an effort to avoid application of such reforms. Plaintiffs' attorneys, aware of the potential impact on their cases and fees, are unlikely to delay filing and risk being subjected to the more stringent post-reform legal standards. This surge in pre-reform filings could create a temporary increase in litigation volume in those states as attorneys move to preserve their clients' interests under current, more favorable rules.
Another factor with implications for property insurance claims, one that should be closely monitored, is the potential effect of tariffs on imports such as on construction materials. Tariffs would likely drive up the cost of building materials, which could, at least temporarily, increase the costs borne by insurers for covered replacement value claims. In addition, reducing the available construction labor supply may drive up labor costs for repairs and reconstruction. These higher costs, in turn, could lead to increased insurance premiums as insurers adjust their underwriting to reflect higher costs.
Vasu Srinivasan, global insurance practice leader for claims at Genpact
P&C insurance industry, particularly personal insurance, is expected to improve its profitability with the favorable trends of a stable economy, easing of inflation, supply chain issues and claims costs, and improvements to premium rates and investment yields. However, this outlook can change with one or two extreme weather events.
The insurance industry craves certainty and precision in assessing the impact of climate change and catastrophe risk. But until now, insurance carriers have struggled with data quality and completeness due to large volumes of unstructured data. The emergence of generative AI is changing that. Because of this, in 2025, we can expect significant investments in gen AI-led data management and automation to help improve the accuracy of catastrophe modeling and claims adjusting and to enhance the effectiveness of fraud prevention measures and the experience of adjusters. The data and machine learning used for risk assessment and pricing will continue to evolve and improve in the year ahead to bring as much certainty, precision and trust into the equation.
Rory Yates, SVP corporate strategy and global at EIS
While premium increases in property insurance are expected to remain moderate in 2025, long-standing issues will persist.
Without greater support and engagement from insurers, consumers will continue to face underinsurance at the point of claim, and preventable risks like water damage will go unchecked. In parallel, rising churn rates are nearing a tipping point, and will push insurers to rethink coverage delivery and customer engagement.
Imperative: Home insurance should be viewed as a gateway product. Securing a customer's home should mark a pivotal relationship moment, unlocking opportunities for both customer loyalty and insurer value. The future lies in active insurance - a data-driven relationship that delivers value through hyper-personalized advice and smart cross-selling.
Auto insurance pricing should begin to stabilize, with potential reductions as inflationary pressures ease.
At the same time, the ongoing challenge of long-term viability will drive renewed focus on what a truly transformed car insurance product looks like. We believe the future lies in solutions that are risk-mitigating, embedded, and adaptive, particularly for multi-use scenarios.
Imperative: 2025 should see a strong emphasis on enhancing the customer experience and developing data-fluid ecosystems that streamline the entire process, from quote to claim. Thus making it more efficient, customer-friendly, and geared towards self-service.
(These responses were shared with other publications)
Casey Kempton, president of Nationwide Personal Lines
Consumer adoption of technologies that leverage IoT and AI will continue to rise: For insurance carriers, this presents an opportunity to provide real-time monitoring of conditions in the home that could lead to property loss ranging from minor incidents to severe water damage or electrical issues. Nationwide is leaning into partnerships with smart home device vendors: Resideo, Leakbot, Phyn and Ting. Having these solutions benefits both the customer and insurer, as they help deliver peace of mind, provide prevention capabilities, reduce claims costs and offer financial benefits.
Data from smart home devices will enable insurers to manage risks proactively. Sensors detecting water leaks, smoke or electrical issues can allow immediate intervention, preventing minor issues from becoming major claims.
Insurers will develop tailored coverage options to reflect the specific needs and risks and smart home devices will become a component of offerings, enhancing customer satisfaction and ensuring more comprehensive protection.
The expansion of telematics in auto insurance will give drivers greater control over their premiums through usage-based insurance (UBI) programs. Monitoring driving behavior will provide personalized feedback and rewards for safe driving. Nationwide's telematics program empowers drivers to control their auto insurance premiums through UBI. The program monitors driving habits like speed and braking, offering personalized feedback to enhance safety. Safe drivers can earn discounts and rewards, making their insurance more affordable. We also offer solutions for low mileage customers. Telematics promotes safe driving and can provide financial benefits to policyholders.
Ensuring data privacy and security will be paramount. Insurers will continue to invest in robust cybersecurity measures and maintain transparent communication about data usage to build customer trust. Nationwide Insurance prioritizes data privacy and security by using encryption, identity verification and secure access methods to protect customer information. They collect data to improve services and allow customers to limit information sharing for marketing.
