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Trends to Watch as We Close Out 2025: The Property Insurance Market

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As we approach the end of 2025, the property insurance marketplace is navigating a mix of change, challenge and opportunity. Here’s a look at the key trends shaping the sector — and what they might mean for insurers, brokers and property owners alike.

1. Climate-Driven Losses Are Now the New Normal

The pace and severity of natural catastrophes continue to place major pressure on the property insurance market. The Swiss Re Institute estimates that global insured losses from natural catastrophes hit roughly US $80 billion in the first half of 2025, nearly double the 10-year average. (Reuters+2Insurance Journal+2)
For insurers, that means heavier claims, tougher underwriting decisions and heightened scrutiny of exposures in high-risk zones.

What to watch:

  • Insurers will increasingly pull back or raise rates in high-catastrophe zones — e.g., coastal and wildfire-prone areas.
  • Property owners in those zones will receive stronger signals to invest in resilience (storm hardening, wildfire mitigation, flood defence).
  • Coverage gaps may grow where private insurers no longer provide adequate support, leading to more reliance on state/last-resort markets.

2. Pricing and Coverage Conditions Are Mixed — Softening in Some Segments, Hardening in Others

While recent years were characterised by sharp rate increases and tightening terms, there are signs that some parts of the market are stabilising or even softening. For example:

  • The Alera Group in its 2025 P&C update notes greater market stability, with disciplined underwriting, improving investment yields, and signs that premium growth may moderate. (Alera Group)
  • In commercial property, accounts with favourable loss history and limited catastrophe exposure may now see flat to single-digit rate increases, rather than the double-digit hikes of earlier years. (Dominion Risk+1)
  • On the flip side, in the homeowners/home-insurance space, average premiums remain elevated, and the insurers’ “combined ratio” suggests limited profitability in some segments. (Rate)

Key take-aways:

  • For well-performing risks, carriers are competing — more capacity, more flexible terms.
  • For high-risk exposures (wildfire zones, flood zones, older properties in hazard-prone states) terms remain challenging: higher deductibles, non-standard exclusions, pressured availability.
  • Brokers and agents who can help clients demonstrate strong mitigation/maintenance will be in demand.

3. Technology & Risk-Modelling Innovations Are Moving From “Nice to Have” to “Must-Have”

Insurers are rapidly expanding their use of technology — sensors, drones, satellite imagery, IoT monitoring, artificial intelligence — to refine risk assessments, improve underwriting and streamline claims. According to a recent legal-firm insight, insurers are deploying drones, satellite-imagery and IoT to track damage and property condition in real time. (Greenberg Traurig)
Meanwhile, homeowners are seeing insurers push risk-mitigation incentives (smart-home sensors, leak detectors, fire-resistant construction) as a way to differentiate risk. (Rate)

What this means:

  • Risk-differentiation will widen: properties with upgraded resilience features may enjoy better terms/discounts.
  • Older or non-mitigated properties may face fewer options or harsher terms.
  • Agents and insurers who embrace these tools will have a competitive edge, especially in emerging hazard-zones.

4. Reinsurance and Capacity Pressures Remain Real

While direct insurance pricing may be moderating for some risks, the broader ecosystem — especially reinsurance — remains under strain. The costs of reinsurance for catastrophe risk continue to climb as global natural hazard exposures grow. (Greenberg Traurig)
Also, some last-resort markets (state-backed, residual lines) are under pressure to raise rates or adjust eligibility, particularly in states with chronic exposure. (San Francisco Chronicle)

Implication:
Insurers must manage their reinsurance treaties carefully, be selective about exposures they carry, and pass through appropriate pricing and terms to stay sustainable.

5. Market Size is Growing — With Geographic and Product Gaps Emerging

From a volume perspective, the property-insurance market remains on a growth path. For example, in North America the market for property insurance was projected to reach about US $365 billion in 2025, with a five-to-seven-year compound annual growth rate (CAGR) of nearly 7%. (Statista) Globally, a report projects the property-insurance market to be around US $364.75 billion in 2025, growing toward ~US$591 billion by 2034. (Business Research Insights)

Yet, growth is uneven:

  • Regions with escalating risk (wildfire, flood, storm) may struggle with supply and affordability.
  • Specialized products (wildfire-only, flood-only, resiliency add-ons) are gaining traction.
  • Bundled products (home + auto) and value-added services (risk-engineering, smart-home upgrades) are becoming differentiators.

6. Homeowners Face Increasing Burden — Affordability, Availability and Risk

For homeowners, especially in climate-exposed states (e.g., coastal Florida, wildfire-prone California), the challenges are mounting:

  • Rising premiums and deductibles: some reports show average home-insurance premiums nationally up ~20 % year-over-year in certain markets. (Rate+1)
  • Higher deductibles and more peril-specific deductibles (wind/hail, wildfire, flood) are becoming more common. (Matic Insurance)
  • Coverage availability is still strained in many high-risk ZIP codes; the E&S (Excess & Surplus) market is filling gaps. (Matic Insurance)

For agents and homeowners:

  • Risk mitigation (roof upgrades, fire-resistant landscaping, flood mitigation) is no longer optional—it can materially affect access and cost of coverage.
  • The choice of market (traditional carrier vs. surplus market) matters more than ever; early renewal/placement is advised.
  • For homeowners in highly exposed zones, budgeting for rising insurance costs (and potential policy non-renewals) is prudent.

7. Regulatory & Geographic Regulation Shifts

Regulators in states like Hawaii, Florida and California are responding to the stability challenges in property-insurance markets. For example, in Hawaii legislators pledged efforts to stabilise the market in the face of rising rates and insurers pulling out. (AP News)
Rate filings and underwriting criteria adjustments are happening in several jurisdictions — meaning agents must stay abreast of local regulatory changes that could affect availability, coverage form, or premium.

Looking Ahead to Late 2025 and Early 2026

As we close out 2025, a few strategic themes for stakeholders:

  • For insurers and brokers: Market segmentation will deepen. Strong, well-mitigated risks will benefit from capacity and competition. Weakly mitigated risks will face greater terms and possibly coverage erosion.
  • For homeowners/property owners: Now is a contact point: review your property’s risk profile, invest in mitigation where possible, explore multiple carriers, and monitor renewal dates early.
  • For agents in your position (auto/property insurance): There’s an opportunity to advise clients on the “property side” in addition to auto — helping them understand risk exposures, mitigation, bundling opportunities, and market shifts. For example, bundling home + auto may give you more leverage.
  • For regulatory watchers: The interplay of climate risk, insurance affordability, and public policy will remain front-and-centre. Watch for state-level reforms, changes in last-resort insurers, and potential new coverage mandates or premium subsidies.

What Lies Ahead

The property-insurance market at the end of 2025 is in a state of transition. Big picture: demand is growing, but risk is mounting and not evenly distributed. Pricing and terms are moderating in some segments — yet for high-exposure zones the pressure remains acute. Technology, mitigation and geographic nuance will distinguish winners from laggards.

For you (and your clients) this means: be proactive. Know the risks. Position properties (or clients’ homes) for reward (through mitigation) rather than punishment. And stay flexible — the “next renewal” is likely to look quite different from the last.

About the Author:

David Dandaneau is a client relations analyst that covers the insurance and financial services industry. He is known for his insightful analysis and comprehensive coverage of market trends and regulatory developments.

References

Alera Group. (2025, January 15). 2025 property and casualty market update. Alera Group. https://aleragroup.com/insights/alera-groups-2025-property-and-casualty-market-update

Associated Press. (2025, March 10). Hawaii lawmakers pledge to stabilize property insurance market amid rate increases. AP News. https://apnews.com/article/9119f220251bb44eced5ffb4ddd80b15

Business Research Insights. (2025). Property insurance market size, share, growth, and forecast 2025–2034. https://www.businessresearchinsights.com/market-reports/property-insurance-market-125238

Domrisk. (2025, March 5). 2025 market outlook: Commercial property insurance. https://domrisk.com/2025/03/2025-market-outlook-commercial-property-insurance

Greenberg Traurig, LLP. (2025, March 1). Five trends to watch in the 2025 property insurance market. https://www.gtlaw.com/en/insights/2025/3/5-trends-to-watch-in-2025-property-insurance-market

Matic Insurance. (2025, April). 2025 home insurance report. https://matic.com/blog/2025-home-insurance-report

Rate.com. (2025, May 20). Consumer insights: Home insurance trends for 2025. Guaranteed Rate Insurance. https://www.rate.com/insurance/resources/consumer-insights-home-insurance-trends-for-2025

Reuters. (2025, August 6). Global insured catastrophe losses hit $80 billion in first half of 2025, report shows. Reuters. https://www.reuters.com/business/environment/global-insured-catastrophe-losses-hit-80-billion-first-half-2025-report-shows-2025-08-06

San Francisco Chronicle. (2025, August 21). California FAIR Plan seeks huge rate hike: Map shows which ZIPs hit hardest. https://www.sfchronicle.com/california-wildfires/article/fair-plan-insurance-rate-21081370.php

Statista. (2025). Property insurance market in North America — Revenue forecast 2025. https://www.statista.com/outlook/fmo/insurances/non-life-insurances/property-insurance/north-america

Florida Homeowners Face Challenge After Being Dropped from State-Run Insurance Program

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Florida homeowners are once again feeling the squeeze as thousands are being removed from the state-run insurer of last resort, Citizens Property Insurance Corporation, and redirected to private carriers. The move is part of an ongoing effort to reduce the size of Citizens’ policy portfolio and shift risk back into the private market.

When homeowners are “depopulated” from Citizens, they are required to accept coverage from an alternative private insurance company if the offered premium is within 20% of their Citizens rate. For many, this creates both relief and frustration: while it means they may avoid losing coverage altogether, it also leaves them with limited options and rising costs.

“I was paying $2,800 a year with Citizens, and the new carrier came in at $3,200. It’s technically within the 20% rule, so I had no choice but to move,” said one Tampa homeowner. “It feels like a forced decision at a time when the market is already tough.”

Insurance analysts note that while the depopulation program helps reduce taxpayer exposure to catastrophic hurricane losses, it places additional pressure on families already navigating skyrocketing premiums, stricter underwriting, and fewer choices. Private carriers, however, argue that they offer more sustainable long-term solutions than Citizens, which was never intended to be a permanent insurer for a large share of the market.

State regulators defend the process, emphasizing that the 20% price window is meant to strike a balance between protecting consumers from steep cost increases while encouraging participation in the private market. Without this system, they warn, Citizens could swell beyond capacity, putting all Floridians at risk of paying hefty assessments after a major storm.

Still, homeowners are left in a difficult position. With hurricane season stretching until November and reinsurance costs continuing to climb, experts say Florida’s property insurance crisis is far from over. For many, the decision isn’t whether they want to leave Citizens—it’s how they can afford to stay insured at all.

About the Author:

David Dandaneau is a client relations analyst that covers the insurance and financial services industry. He is known for his insightful analysis and comprehensive coverage of market trends and regulatory developments.

How Smart Tech is Redefining Insurance Practices

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As climate risks intensify and sustainability becomes a central concern across industries, technology is playing a crucial role in promoting sustainable living—and it’s transforming the insurance landscape along the way. From smart home devices to renewable energy systems and eco-friendly vehicles, technological innovations are not only reducing environmental impact but also reshaping how insurers assess risk, price policies, and engage with customers.

Smart Technology and Risk Reduction

Smart home devices like water leak detectors, fire sensors, and energy-efficient thermostats do more than cut down utility bills—they reduce the frequency and severity of claims. Insurance providers are increasingly offering discounts to homeowners who install these technologies, recognizing their value in loss prevention.

Additionally, insurers are leveraging IoT data to develop more accurate underwriting models. A home equipped with real-time monitoring systems provides actionable data that allows insurers to assess property risk more precisely, tailor coverage, and even proactively alert customers to potential hazards.

Green Energy and Policy Innovation

The rapid adoption of solar panels, electric vehicles (EVs), and battery storage systems has introduced new underwriting considerations—and opportunities. For instance, solar panels may increase property values but also require specialized coverage due to unique fire or weather-related risks.

Auto insurers are also adapting to the growing EV market. As electric cars become more common, insurers are developing products that account for different repair costs, battery performance, and usage patterns. Furthermore, many companies are offering incentives for insuring low-emission vehicles, aligning with sustainability goals.

Sustainable Infrastructure and Catastrophe Modeling

Climate-related catastrophes like floods, wildfires, and hurricanes are becoming more frequent and severe. Technological advances in predictive analytics and climate modeling are helping insurers better understand and anticipate these events. By incorporating data from smart city infrastructure and satellite imagery, insurers can improve catastrophe risk assessments, inform policy pricing, and enhance resilience strategies.

Sustainable construction methods and materials—such as energy-efficient roofing and fire-resistant siding—are also being factored into underwriting decisions. Insurers are starting to reward property owners who invest in these technologies with favorable rates or coverage options.

Waste Reduction and Digital Transformation

Paperless policies, digital claims processing, and virtual inspections are part of a broader move toward sustainability within the insurance industry itself. These practices not only reduce environmental impact but also streamline operations and improve customer experience.

Furthermore, insurers are exploring the role of blockchain in verifying sustainable practices and green certifications, especially in commercial property and corporate liability insurance.

Positioning for the Future

As technology continues to drive sustainable living, insurers must adapt to both the risks and opportunities it presents. Forward-thinking companies are:

  • Partnering with tech providers and clean energy companies
  • Developing products that reward eco-conscious behavior
  • Investing in analytics to model emerging environmental and technological risks
  • Educating clients on how sustainable living choices can reduce premiums and prevent losses

Sustainability is no longer a side initiative—it’s central to risk management in the 21st century. By embracing technology and promoting sustainable practices, the insurance industry can not only protect its bottom line but also play a key role in building a more resilient and environmentally responsible future.

Social Change: The Forces Reshaping Society in 2024

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The year 2024 marks a pivotal moment in the story of social change, driven by rapid technological advances, growing environmental concerns, and evolving cultural norms. Across the globe, movements and innovations are pushing boundaries, challenging traditions, and redefining the human experience.

The Rise of Digital Activism
Social media platforms have become powerful tools for advocacy, mobilization, and education. In recent months, global campaigns like the “Green Reset” movement have rallied millions online to demand stricter climate policies and corporate accountability. With hashtags like #ActNowForTomorrow trending worldwide, digital activism is proving that virtual platforms can translate into real-world impact.

“Social media allows us to amplify voices that were once marginalized,” says digital strategist Amira Lopez. “It’s no longer about a single leader or organization. It’s about communities coming together.”

Environmental Justice Takes Center Stage
Climate change is not a distant threat; it’s a current crisis. Record-breaking heatwaves, catastrophic floods, and raging wildfires have pushed environmental justice to the forefront of public consciousness. Grassroots organizations are partnering with policymakers to address the intersection of environmental degradation and socioeconomic inequality.

One such initiative, the “Climate Equity Project,” focuses on ensuring underserved communities—often the hardest hit by climate disasters—receive the resources and support they need to adapt and thrive.

Redefining Gender and Equality
The global conversation about gender is evolving, with movements advocating for inclusivity and breaking traditional binaries. Countries are passing progressive laws to protect LGBTQ+ rights, while workplaces are adopting more inclusive policies to ensure gender equity.

“This is about more than just representation,” says activist and author Zane Patel. “It’s about creating a world where everyone feels seen, valued, and empowered to be themselves.”

The Role of Technology
From artificial intelligence to blockchain, technology is both a driver and a disruptor of social change. Innovations in healthcare are making treatments more accessible, while digital education platforms are bridging gaps in learning opportunities. However, the rapid pace of technological advancement also raises questions about privacy, ethics, and equity.

“We have to ensure that technology serves humanity, not the other way around,” warns ethicist Dr. Lina Arjun.

A Global Movement
While challenges like inequality, political polarization, and environmental degradation remain significant, the spirit of collective action offers hope. From youth-led protests to corporate commitments to sustainability, social change is becoming a shared responsibility.

As the year progresses, the question is no longer if change is possible but rather how individuals, communities, and institutions will shape the future.

Top Trends Facing the Property and Casualty Market in 2024

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The property and casualty (P&C) insurance market is experiencing significant shifts in 2024, driven by technological advancements, climate change, regulatory updates, and evolving consumer expectations. As insurers navigate these changes, several key trends have emerged that are helping shape the industry landscape.

1. Digital Transformation and Insurtech Integration

The integration of insurtech is revolutionizing the P&C insurance sector. Advanced data analytics, artificial intelligence (AI), and machine learning are enhancing underwriting accuracy, risk assessment, and customer experience. Insurtech startups are partnering with traditional insurers to offer innovative solutions, such as usage-based insurance (UBI) and on-demand coverage, which cater to the modern consumer’s needs for flexibility and personalization.

2. Climate Change and Catastrophe Modeling

Climate change continues to be a critical concern for the P&C market. Increasing frequency and severity of natural disasters, such as hurricanes, wildfires, and floods, are leading to higher claims and losses. Insurers are investing in advanced catastrophe modeling and predictive analytics to better assess and manage these risks. Additionally, there is a growing emphasis on sustainable practices and green insurance products that incentivize policyholders to adopt environmentally friendly measures.

3. Regulatory Changes and Compliance

Regulatory landscapes are evolving, with new laws and guidelines being introduced to address emerging risks and ensure consumer protection. In 2024, insurers are focusing on enhancing compliance frameworks to meet stricter data privacy regulations and cybersecurity standards. The rise of digital channels has also prompted regulators to scrutinize digital sales practices, leading to the development of more robust guidelines for online insurance transactions.

4. Telematics and IoT in Risk Management

Telematics and the Internet of Things (IoT) are playing a pivotal role in transforming risk management in the P&C insurance sector. Telematics devices, particularly in auto insurance, provide real-time data on driving behavior, enabling insurers to offer personalized premiums based on individual risk profiles. Similarly, IoT devices in homes and businesses help monitor potential hazards, such as water leaks or fire risks, allowing for proactive mitigation and reduced claims.

5. Focus on Cyber Insurance

With the rise in cyber threats, cyber insurance has become a critical component of the P&C market. Businesses and individuals are increasingly seeking coverage to protect against data breaches, ransomware attacks, and other cyber risks. Insurers are expanding their cyber insurance offerings and developing comprehensive policies that address the evolving nature of cyber threats. This trend underscores the importance of cybersecurity in the overall risk management strategy.

6. Customer-Centric Innovations

In an era of heightened customer expectations, insurers are prioritizing customer-centric innovations. This includes the adoption of omnichannel communication strategies, offering seamless interactions across digital and traditional platforms. Personalized policy options, streamlined claims processes, and enhanced customer service through AI-driven chatbots are some of the ways insurers are improving customer engagement and satisfaction.

7. Expansion of Parametric Insurance

Parametric insurance is gaining traction as a viable alternative to traditional indemnity insurance. Unlike traditional policies, parametric insurance pays out a predetermined amount based on the occurrence of a specific event, such as a natural disaster reaching a certain intensity. This model offers faster claims processing and payouts, providing policyholders with quicker financial relief. The simplicity and efficiency of parametric insurance are driving its adoption across various segments, including agriculture, travel, and climate-related risks.

The property and casualty insurance market in 2024 is marked by rapid technological advancements, heightened awareness of climate risks, regulatory changes, and a focus on customer-centric approaches. Insurers that embrace these trends and invest in innovation are likely to thrive in this dynamic environment. As the industry continues to evolve, staying ahead of these trends will be crucial for delivering value to policyholders and maintaining a competitive edge.

About the Author:

David Dandaneau is a insurance agent that covers the insurance and financial services industry. He is known for his insightful analysis and comprehensive coverage of market trends and regulatory developments.