Mixed Market Signals Demand Proactive Strategy
Tighter underwriting and economic pressures mean it’s more necessary than ever for clients to take a proactive, data-driven and strategic approach to secure strong insurance programs.
Given these conditions, organizations should:
Start renewal discussions with your broker early (60-150 days out) and be willing to provide detailed financial information to underwriters to allow for underwriting review and strategic options.
Demonstrate strong risk management, financial stability and safety programs.
Rate Drivers in Q3:
When you partner with HUB, you're at the center of a vast network of experts who will help you improve your profitability, enhance the vitality of your workforce and remain resilient into the future. For more information on how to manage your insurance costs, reduce your risk and take care of your employees, talk to your HUB advisor or visit hubinternational.com. We're here to help.
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Q3 Rate Report
Based on proprietary insurance premium data, HUB’s network of experts provides insights into the state of the insurance marketplace each quarter. Download our Rate Report to receive detailed rate insights and guidance to help minimize your total cost of risk.
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Insurance market dynamics continued to shift during Q3, with several key trends shaping rates and client strategies across property, casualty, auto, cyber and alternative risk solutions. While there are signs of relief in certain market segments, others remain challenged, underscoring the importance of proactive planning and disciplined risk management.
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Insurers have been closely watching seasonal catastrophe (CAT) risks such as named windstorms and wildfires. As hurricane season enters its most active phase, property insurers are keeping a close eye on CAT-prone locations. Properties with wildfire risk are still under pressure, with clients facing flat or increased premiums on renewals, while diversified accounts are seeing double-digit decreases. Though insurers are well-capitalized to absorb significant losses, several major CAT events could slow the current stabilization and softening in property rates.
Stability in Property Rates Hinges on CAT Activity
Although rates for many lines of business have stayed flat or decreased slightly, inflation-driven exposure increases are keeping premiums stable as underwriters practice extreme discipline while evaluating and rating accounts. Payroll audits are driving higher workers’ compensation premiums, while accurate property insured-to-value is essential to avoid underinsurance and ensure adequate claims recovery. Carriers continue to reward accounts with strong controls, solid financials and proven risk management practices, particularly in the small to mid-market, auto and casualty segments where underwriting rigor leads the market. Conversely, companies with weak financials, poor maintenance or inadequate safety programs face the risk of higher premiums or reduced capacity.
Carriers continue to sharpen their focus on evolving supply chain risks and the potential downstream impact on their insureds. It is no longer sufficient for organizations to understand how direct supplier disruptions could affect them — they must also assess vulnerabilities in “suppliers behind suppliers,” where a single point of failure can cascade through operations. Global interdependencies and tariff uncertainty add further pressure, making contingent business interruption analysis and strategies to diversify materials sourcing essential.
Rates vary significantly depending on client loss exposure and market conditions, underscoring the importance of working with a broker that has deep expertise and relationships across the insurance market. The commercial auto market, for example, is one of the most difficult to secure coverage, with fleet size, geography and litigation risks driving underwriting challenges. Carriers are reducing their appetite, and in some cases declining accounts with a large number of units or pulling back entirely in high-risk regions. Insureds that need high limits (more than $5 million) often require multiple carriers. It is important to begin renewal discussions early, evaluate telematics solutions, strengthen fleet safety programs and enforce driver screening protocols to secure the right coverage for your risk. In contrast, the cyber market is among the most favorable, with abundant capacity and moderating rate decreases, which is creating opportunities for clients to expand coverage or negotiate improved terms. Organizations with broker partnerships can leverage these conditions to secure stronger, more cost-effective protection at a time of growing cyber risk.
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Supply Chain Vulnerabilities Top of Mind
Inflation & Other Economic Factors Prompting Underwriting Discipline
Market Conditions Diverge Sharply Across Lines of Business
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Consider alternative structures like parametrics or captives only with full understanding of requirements or feasibility.
Review supply chain interdependencies and update continuity plans.
Reassess valuations and exposures in light of inflation and economic uncertainty.
Work with an experienced broker that understands your industry and specific business needs.
Proactive Planning Drives Favorable Insurance Terms
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Interest in captives is growing, though many clients are unfamiliar with what they require to set up and maintain. Captives demand significant upfront capital, licensed claims administration and adherence to regulatory requirements. While they can provide long-term cost stability, they can also introduce frictional costs and complexities. Organizations should work with an experienced broker to gain a clear, practical summary of captive pros and cons to ensure they are prepared for what is necessary before pursuing this path.
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