According to Conning, the investment company serving the insurance industry, the segment will see continued strong growth through 2025. During a recent webinar, company analysts said inflation, tariffs, interest rates and geopolitical factors are among the issues that will affect the property and casualty market through the end of this year and into next.
Overall, this type of insurance is expected to see 7% premium growth in 2025, Conning says.Commercial property and commercial auto will see higher rates of premium growth, at 12% and 11% respectively.Home insurance expects 10% annual growth, apersonal car insurancewill increase by about 7%.Insurers reveal that the legal system is their biggest short-term and long-term concern.Alan Dobbins, director of insurance research at Conning, says the changing legal environment has created concerns for insurers.
The growing number of heavy convictions, increased funding for third-party litigation, more complex class actions, increasing burden of claims and an increase in product damage claims are contributing to insurers' concerns about the litigation environment, he says.
Continued fiscal strain was also cited by insurers as a serious long-term problem, but not as serious in the short term.Elevated inflation, modest gross domestic product growth, a weakening labor market and near-record levels of federal debt have added to the concern.
However, insurers disagree about their outlook for other issues that affect them in the short and long term.Tariffs are seen as a moderate problem in the short term, but less so in the long term.Immigration policy is not a major problem in the short term, but moderate in the long term.
2025 got off to a rough start for property insurers
The year got off to a rough start for property insurers, with wildfires in California leading to $20 billion in losses.However, strong investment income continued to be a critical headwind during the year, ...
According to Conning, the investment company serving the insurance industry, the segment will see continued strong growth through 2025. During a recent webinar, company analysts said inflation, tariffs, interest rates and geopolitical factors are among the issues that will affect the property and casualty market through the end of this year and into next.
Overall, this type of insurance is expected to see 7% premium growth in 2025, Conning says.Commercial property and commercial auto will see higher rates of premium growth, at 12% and 11% respectively.Home insurance expects 10% annual growth, apersonal car insurancewill increase by about 7%.Insurers reveal that the legal system is their biggest short-term and long-term concern.Alan Dobbins, director of insurance research at Conning, says the changing legal environment has created concerns for insurers.
The growing number of heavy convictions, increased funding for third-party litigation, more complex class actions, increasing burden of claims and an increase in product damage claims are contributing to insurers' concerns about the litigation environment, he says.
Continued fiscal strain was also cited by insurers as a serious long-term problem, but not as serious in the short term.Elevated inflation, modest gross domestic product growth, a weakening labor market and near-record levels of federal debt have added to the concern.
However, insurers disagree about their outlook for other issues that affect them in the short and long term.Tariffs are seen as a moderate problem in the short term, but less so in the long term.Immigration policy is not a major problem in the short term, but moderate in the long term.
2025 got off to a rough start for property insurers
The year got off to a rough start for property insurers, with wildfires in California leading to $20 billion in losses.However, strong investment income continued to be a critical headwind during the year, Dobbins says.
Another factor affecting the auto insurance industry this year is the cost of bodily injury and vehicle damage.Health care costs are increasing, Dobbins says.Growth in vehicle repair costs slowed after the supply chain crisis during the pandemic, but those costs are starting to pick up again.
Property construction spending is also starting to pick up after peaking in 2021-22.
Frequently asked questions
What does Conning predict for the property and casualty insurance market in 2025?
Answer: Conning expects steady and continued growth in the sector through 2025. Average premium growth is forecast at around 7%.The strongest growth is expected in commercial real estate, commercial auto and home insurance.The reasons are a combination of inflation, higher claims costs and a tighter market.
Which insurance segments will see the highest growth?
Answer: The highest growth rates are expected in commercial property (12%) and commercial auto (11%) insurance.Home insurance will also grow strongly at around 10% per year.Personal car insurance will increase more moderately – by around 7%.This indicates increased pressure on business and property risks.
Why is the litigation environment the biggest concern for insurers?
Answer: Insurers are alarmed by the increasing number of heavy court verdicts and expanding third party funding of lawsuits.Class actions are becoming more complex and more expensive to defend.In addition, product liability claims are on the rise.All of this increases claims costs and makes risk more difficult to predict.
How did natural disasters affect the sector in 2025?
Answer: The year began with heavy losses for insurers due to the wildfires in California.Damages are estimated at around $20 billion.This has put serious pressure on the companies' results, especially in the property segment.However, investment income partially offset the losses.
What costs increase the tension in car insurance?
Answer: The main factors are higher personal injury medical costs and the new rise in auto repair prices.After a temporary slowdown following the pandemic, parts and labor costs are on the rise again.This results in more expensive benefits for insurers.As a result, pressure on policy prices increases.
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According to Conning, the investment company serving the insurance industry, the segment will see continued strong growth through 2025. During a recent webinar, company analysts said inflation, tariffs, interest rates and geopolitical factors are among the issues that will affect the property and casualty market through the end of this year and into next.
Overall, this type of insurance is expected to see 7% premium growth in 2025, Conning says.Commercial property and commercial auto will see higher rates of premium growth, at 12% and 11% respectively.Home insurance expects 10% annual growth, apersonal car insurancewill increase by about 7%.Insurers reveal that the legal system is their biggest short-term and long-term concern.Alan Dobbins, director of insurance research at Conning, says the changing legal environment has created concerns for insurers.
The growing number of heavy convictions, increased funding for third-party litigation, more complex class actions, increasing burden of claims and an increase in product damage claims are contributing to insurers' concerns about the litigation environment, he says.
Continued fiscal strain was also cited by insurers as a serious long-term problem, but not as serious in the short term.Elevated inflation, modest gross domestic product growth, a weakening labor market and near-record levels of federal debt have added to the concern.
However, insurers disagree about their outlook for other issues that affect them in the short and long term.Tariffs are seen as a moderate problem in the short term, but less so in the long term.Immigration policy is not a major problem in the short term, but moderate in the long term.
2025 got off to a rough start for property insurers
The year got off to a rough start for property insurers, with wildfires in California leading to $20 billion in losses.However, strong investment income continued to be a critical headwind during the year, ...
According to Conning, the investment company serving the insurance industry, the segment will see continued strong growth through 2025. During a recent webinar, company analysts said inflation, tariffs, interest rates and geopolitical factors are among the issues that will affect the property and casualty market through the end of this year and into next.
Overall, this type of insurance is expected to see 7% premium growth in 2025, Conning says.Commercial property and commercial auto will see higher rates of premium growth, at 12% and 11% respectively.Home insurance expects 10% annual growth, apersonal car insurancewill increase by about 7%.Insurers reveal that the legal system is their biggest short-term and long-term concern.Alan Dobbins, director of insurance research at Conning, says the changing legal environment has created concerns for insurers.
The growing number of heavy convictions, increased funding for third-party litigation, more complex class actions, increasing burden of claims and an increase in product damage claims are contributing to insurers' concerns about the litigation environment, he says.
Continued fiscal strain was also cited by insurers as a serious long-term problem, but not as serious in the short term.Elevated inflation, modest gross domestic product growth, a weakening labor market and near-record levels of federal debt have added to the concern.
However, insurers disagree about their outlook for other issues that affect them in the short and long term.Tariffs are seen as a moderate problem in the short term, but less so in the long term.Immigration policy is not a major problem in the short term, but moderate in the long term.
2025 got off to a rough start for property insurers
The year got off to a rough start for property insurers, with wildfires in California leading to $20 billion in losses.However, strong investment income continued to be a critical headwind during the year, Dobbins says.
Another factor affecting the auto insurance industry this year is the cost of bodily injury and vehicle damage.Health care costs are increasing, Dobbins says.Growth in vehicle repair costs slowed after the supply chain crisis during the pandemic, but those costs are starting to pick up again.
Property construction spending is also starting to pick up after peaking in 2021-22.
Frequently asked questions
What does Conning predict for the property and casualty insurance market in 2025?
Answer: Conning expects steady and continued growth in the sector through 2025. Average premium growth is forecast at around 7%.The strongest growth is expected in commercial real estate, commercial auto and home insurance.The reasons are a combination of inflation, higher claims costs and a tighter market.
Which insurance segments will see the highest growth?
Answer: The highest growth rates are expected in commercial property (12%) and commercial auto (11%) insurance.Home insurance will also grow strongly at around 10% per year.Personal car insurance will increase more moderately – by around 7%.This indicates increased pressure on business and property risks.
Why is the litigation environment the biggest concern for insurers?
Answer: Insurers are alarmed by the increasing number of heavy court verdicts and expanding third party funding of lawsuits.Class actions are becoming more complex and more expensive to defend.In addition, product liability claims are on the rise.All of this increases claims costs and makes risk more difficult to predict.
How did natural disasters affect the sector in 2025?
Answer: The year began with heavy losses for insurers due to the wildfires in California.Damages are estimated at around $20 billion.This has put serious pressure on the companies' results, especially in the property segment.However, investment income partially offset the losses.
What costs increase the tension in car insurance?
Answer: The main factors are higher personal injury medical costs and the new rise in auto repair prices.After a temporary slowdown following the pandemic, parts and labor costs are on the rise again.This results in more expensive benefits for insurers.As a result, pressure on policy prices increases.