In today's commercial insurance market, buyers aren't just playing the price game — they're evaluating their risk and reallocating investment strategically to close the gaps in coverage. With premiums down and capacity up in some pockets, now is the time to do more than renew on autopilot.
Buyers can now take control, letting strategy — not price and availability — drive their risk and insurance programs. It's important to recognize that the current market isn't a monolith; rather, it's composed of various mini markets, each with its own unique dynamics. Agility and expertise from your brokerage team are more critical than ever. And, although rates have moderated in pockets of the market, capacity challenges remain for certain buyers, emphasizing the growing importance of the Excess and Surplus (E&S) market and non-traditional insurance solutions.
Analyzing your risk profile with an experienced broker can help you understand how to enhance coverage you may have left on the table in the challenged market, fill gaps, explore alternative risk solutions and build resilience for future growth.
Here are key strategies to leverage the current market and seize key coverage opportunities for maximum advantage.
Commercial property insurance
Market insights
The commercial property insurance market continues to soften, and insurers are planning to grow in 2025 due to profitable underwriting, better investment returns, strong premium growth and reduced inflation pressures. As a result, insurance premium rates will remain favorable to buyers. Even with wildfire losses and severe storms over the past year, plenty of coverage is available. Catastrophe-exposed properties in Florida, California and other coastal regions may require access to the E&S market where coverage is also available.
Advantage points
Review your full risk program: Consider this a wake-up call to review your property risk and insurance program and be open to re-designing for growth and resilience versus for what you can afford.
Take advantage of multi-year deals: Leverage carrier offerings like multi-year deals and guaranteed rate reductions while the soft market last — these opportunities won't be around forever.
Prioritize catastrophe (CAT) coverage: Evaluate flood and severe convective storm risk and explore solutions like deductible buy-downs or program marketing to reduce deductibles to pre-spike levels.
Don't rely solely on models or lender requirements: Re-look at engineering and modeling information, price out full limit policies, leverage tools like Gallagher Forecast and consider additional limits for peace of mind and protection against unforeseen events.
Address emerging risks: Look at prior uninsurable exposures to see if coverage now is available. The risk of cyber incidents causing physical damage is on the rise and is a significant gap for many organizations.
Focus on quality: Prioritize quality by partnering with financially stable markets for robust, well-capitalized protection over short-term, opportunistic options.
Don't lose sight of data: Complacency on data quality can lead to overcorrections and even contribute to a hardening marketing — remain diligent and don't fall behind on best practices. It's also important to keep your property valuations updated to avoid surprises if you need to make a claim or if market conditions change.
Leverage wholesale expertise: If your insurance needs are complex or high-risk, or require specialized coverage beyond standard carriers, working with your broker to connect with a wholesale expert provides access to E&S markets and unlocks and secures specialized or exclusive coverage for these risks.
Commercial casualty insurance
Market insights
The commercial casualty insurance market faces ongoing challenges into 2025, with rate increases, limit compression and restrictive policy terms, particularly in commercial auto and umbrella/excess sectors. Social inflation and litigation, characterized by rising jury awards and a litigious environment, drive higher premiums, particularly in liability lines, with nuclear verdicts — judgments in excess of $10 million — significantly impacting insurers' loss ratios.
- Commercial auto: Insurers face underwriting losses due to rising claim costs, distracted driving, driver shortages, economic uncertainty and increasing accident frequency. Expect premium rate increases; focus on driver safety programs and fleet management.
- Umbrella and excess liability: Premium rates are increasing, with selective insurers requiring detailed submissions for large coverage towers. It's challenging for clients with a loss history, requiring comprehensive submissions.
- Workers' compensation: Workers' comp is stable, with the potential for modest changes; expect future pressures from medical inflation and workforce changes.
- General liability: Expect slight premium rate increases with stringent underwriting for high-risk industries.
- Seek out wholesaler experts: It's important that your broker works with reputable wholesalers who complement your risk strategies and align these strategies with the rest of your commercial insurance providers.
Advantage points
- Focus on loss control: Implementing and maintaining robust safety programs and loss prevention measures can significantly improve your risk profile and will lead to more favorable insurance terms.
- Provide comprehensive information: Detailed and accurate information about your business operations, risk management practices and loss history is crucial for underwriters to assess your risk accurately.
- Start renewals early and be prepared: Focus on detailed data for Auto lines, including vehicle type, radius, locations, mileage, telematics and motor vehicle reports (MVRs). Focus on exposure, safety initiatives and measures.
- Explore emerging technology: Investing in technologies like telematics can enhance driving safety, improve underwriting accuracy and stabilize the insurance market.
- Be open to new options: Work with your broker to access both retail and wholesale markets, including Auto specialty markets; consider buying back lower deductible levels, including corridor deductibles; explore higher umbrella limits.
Directors and Officers insurance
Market insights
The Directors and Officers (D&O) insurance market continues to evolve, with shifting trends in competition, capacity and underwriting strategies shaping the landscape as we move through 2025. The overall environment remains favorable for insureds, and the market is competitive in terms of pricing, with ample capacity available for all executive risk coverages. However, a trend of rate stabilization and flat renewals is developing for specific risk profiles and industry sectors, especially in the higher excess layers. Some insurers are wary of the rating environment, given loss trends in open claims.
In the second half of 2025, we believe the plaintiffs' bar will continue its 2024 pattern of bringing a steady stream of cases against mature public companies across all industries. The reduced premium base may struggle to support future claims amidst emerging or expanding risks, which could negatively impact the near-term financial performance of D&O insurers.
With the slowdown in initial public offering (IPO) and special purpose acquisition companies (SPAC) activity and as we move farther away from the effects of the COVID-19 pandemic, the larger concern for investors is how artificial intelligence (AI) will influence and impact public companies and private companies.
Advantage points
- Stay ahead of risk: Evaluate opportunities to expand coverage, such as entity investigations coverage. Ensure your protection keeps pace with evolving risks.
- Reduce or buy down retentions: Lower your retentions now to position your business for premium advantages in future hard markets.
- Consider higher limits: Reevaluate your coverage and explore higher limits, given competitive market conditions.
- Be transparent: In the current buyer's market, it pays for insureds to openly discuss their strengths and weaknesses with underwriters at renewal. When they do, underwriters are often willing to write policies for companies with higher risk profiles at competitive rates.
- Lean into data: Continue to analyze your data, benchmark performance and strategically secure multi-year deals on the private side.
- Assess what risk to retain in the design of your insurance programs: Consider Side ABC/Side A.
Cyber insurance
Market insights
The cyber insurance market is expanding as threats increasingly turn into claims, with insureds investing in cybersecurity controls to stabilize premiums despite rising incidents. In 2025, primary, excess and reinsurance markets are expected to grow with healthy capacity, driven by 2024's increased competition that led to better terms and coverage.
The E&S space is maintaining soft conditions, but some isolated markets are pushing for rate increases, which is making it a bit more unpredictable
New exclusions for claims related to wrongful data collection, biometrics, pixel tracking and supply chain attacks are raising concerns, with many carriers either not covering these claims or underwriting them cautiously. Federal regulatory pressures may ease, but state regulators will likely maintain a strong focus on compliance, which remains a priority for clients.
Threat actors are expected to continue to target key supply chain players, potentially causing cascading losses. Losses related to the rapid adoption of generative AI may lead to cyber losses but may also impact many other lines of insurance.
Finally, quantum computing is an emerging risk, with the potential to elevate cybercrime by enabling easier decryption of data and access to sensitive data, highlighting the ongoing race against hackers who rapidly bypass today's conventional security controls.
Advantage points
- Leverage pre-negotiated terms with Gallagher's Cyber Advantage panel: Gallagher's retail cyber insurance team has recently negotiated best-in-class cyber insurance coverage terms with several leading cyber carriers. With a pre-determined set of application questions that all panel carriers accept, our clients can now obtain optimal cyber risk transfer solutions while providing efficiencies to the cyber placement process. The Cyber Advantage panel is aimed at helping our middle-market clients with less than $250 million in annual revenue.
- Benefit from cyber risk services: In today's competitive cyber marketplace, almost all carriers are offering free or discounted cyber insurance services. These services often include cyber risk assessments, employee training, penetration testing, compliance help, incident response planning and tabletop exercises.
- Tap into Gallagher's cyber risk management team: Services include auditing with accreditation for Cyber Essentials, Cyber Essentials Plus, IASME and ISO 27001 readiness. Our security testing identifies vulnerabilities through penetration testing and scanning, while our awareness programs train teams on cyber security basics, cyber crime and phishing awareness. Additionally, we conduct phishing simulation campaigns to assess employee responses and offer data breach project management.
- Utilize benchmarking and analytics capabilities: At Gallagher, our clients have access to advanced benchmarking and analytics tools to ensure your organization is properly protected. By analyzing cyber loss trends and assessing your unique risk profile, we help you identify both gaps and opportunities in your coverage. With the current buyers' market presenting favorable conditions, now is the ideal time to procure additional limits and to optimize your organization's risk transfer strategies.
Captives and alternative risk transfer strategies
Market insights
Organizations are increasingly turning to captives and alternative risk transfer solutions to manage exposures arising from the most difficult-to-place and distressed risks. Captive use is increasing, to address business interruption risks stemming from supply chain challenges, climate-related risks, regulatory requirements and umbrella/excess exposures where capacity remains limited. By leveraging captives, companies can effectively navigate these uncertainties and secure more stable and tailored risk management solutions.
Organizations can take advantage of alternative risk strategies to lock in favorable rates and terms for the future and transfer higher levels of risk to the commercial market, while retaining control over specific exposures through alternative risk mechanisms. For mid-market and large organizations with predictable loss profiles, financial stability, strong safety and risk management practices, and a desire to have greater control over coverage, cost and outcomes, today's market is the ideal time to consider alternative risk strategies.
It's a good time to assess your risk long-term management goals and consult with your broker to explore how alternative risk solutions could benefit your business.
Advantage points
- Consider the benefits of more control and flexibility: A captive's key strength is its flexibility, allowing it to adapt quickly to changing company needs or market conditions. Retention levels and insurance parameters can be adjusted, providing agility, long-term stability and protection from market cycles.
- Balance and optimize risk transfer: A captive helps you balance self-insurance and risk transfer, aligning coverage with your risks and resources. Use it as a strategic tool to manage and negotiate effectively in a soft insurance market.
- Seek out more tailored solutions: Captives enable organizations to develop tailored insurance policies designed for their unique risk profile and long-term risk management goals, often allowing for broader coverage options and the ability to overcome exclusions or other restrictions the commercial market applies.
- Evaluate your current captive strategy: Established captive owners and members can adapt to a buyers' market by modifying limits, adding new lines of business, or transferring more risk to the commercial market to optimize their risk management approach.