The insurance market is set for mixed conditions in 2025, signalling a potential recovery from the prolonged hard market. However, challenges like climate change, inflation, and nuclear verdicts will continue to shape the industry, according to insights shared during the recent Infuse webinar series by insurtech company, Send.
Key Predictions for 2025
Auto Insurance
Across North America, auto insurance is expected to soften as insurers regain stability and profitability in personal lines, according to Jennifer Kyung, CEO and founder of NextGen Underwriting. “We’re in a different place for auto,” Kyung noted, highlighting improvements in the U.S. market.
In Canada, however, the story is different. Hard market conditions persist in personal auto and property lines, exacerbated by auto theft claims. Although a 19% dip in theft claims was reported in early 2024, claims have surged 138% over the past decade, according to the Insurance Bureau of Canada. Proposed reforms in Ontario and Alberta’s auto markets may further complicate the landscape for insurers.
Specialty and E&S Lines
Specialty and Excess & Surplus (E&S) lines present growth opportunities, particularly in softer markets. Martina Conlon, executive principal at Datos Insights, noted, “Many insurers are actively exploring these areas to diversify and find new opportunities.”
Property Insurance
Property insurance is expected to remain hardened across North America due to increased losses from natural disasters. Canadian insurers have paid out a record-breaking $8.3 billion in NatCat claims this year.
“Our models, built over 100 years ago, aren’t keeping pace with evolving weather patterns,” explained Tandis Nili, managing principal at EPIC Insurance Brokers & Consultants. “What were once 100-year events are now happening every decade, creating significant unpredictability.”
Broader Market Trends
Liability Challenges
Nuclear verdicts in the U.S. are creating ripple effects across North America, with Canadian insurers watching these litigation trends closely. “Jurors often see these large lawsuits as Monopoly money,” said Nili, adding that insurers are responding by reducing capacity and coverage.
Inflationary Pressures
Inflation continues to impact repair costs, labour, and property values, contributing to market volatility. These pressures and rising claims costs keep insurers on high alert as they navigate these uncertain times.
Navigating the Road Ahead
At Wedgwood Insurance, we understand that staying informed about market trends is essential to making sound decisions. Whether you’re seeking personal or business coverage, our team provides expert advice and tailored solutions to help you navigate an evolving insurance landscape.
Looking for guidance in this dynamic market? Contact us today for trusted advice and dependable service.
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