Responding strategically to uncertain times
“It was the best of times, it was the worst of times…”
In A Tale of Two Cities, Charles Dickens explored the contradictions of his own era. But he could just as easily have been describing the property and casualty marketplace in 2025 for buyers and insurers.
For insurers, conditions remain strong. Underwriting discipline is holding, investment income is rising thanks to higher bond yields, and many carriers are benefiting from years of rate hardening and portfolio optimization.
For buyers, it’s arguably the most favorable environment in the past five to six years. Rates continue to fall across multiple lines as insurers compete for existing and new business, particularly in property, financial lines, and specialty coverages. Third-party liability, where pricing and capacity challenges persist, continues to be the most notable exception.
What truly defines this moment, however, is the depth and breadth of uncertainty surrounding the economy and its potential impact on the insurance marketplace. There are more questions than answers about several important matters — trade, inflation, tax policy, debt, climate volatility, geopolitical risk, regulatory shifts, and the macroeconomic landscape.
In this environment, it’s important to look beyond immediate opportunities for premium savings. Instead, shift your focus toward building resilience. Look to gain a deeper understanding of your risk profile. Enhance coverage where it matters most. And make strategic decisions about how and where to deploy capital.
Our June 2025 Lockton Market Update reflects our latest thinking about the insurance market at a critical time for both buyers and insurers. We hope you find it useful as you plan for the rest of the year and beyond.
Vince Gaffigan U.S. Market Strategy and Engagement Group Leader Lockton
Key takeaways
Insurers continue to report generally positive returns, although first-quarter results highlight how challenging the start of 2025 has been. Carriers continue to focus on risk selection, underwriting discipline, and capital management.
The property insurance market is benefiting from increased competition, yet insurers remain wary of the ongoing potential for large-scale natural catastrophe losses.
Workers’ compensation pricing continues to favor buyers amid continued underwriting gains for insurers.
Liability insurers remain challenged by social inflation and rising loss severity. Broad tort reform remains elusive.
Although D&O rates continued to fall in the first quarter, insurers are signaling that the market may be finally reaching its bottom.
Cyber insurers continue to compete for existing and new business, but we are seeing modest rate increases in some instances as the claims environment grows more challenging.
