The summer of 2025 is shaping up to be pivotal for brokers and risk managers as climate forecasts, litigation pressures, and technology adoption converge to reshape the property and casualty (P&C) landscape. Here’s what you need to know:
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Property, CAT, and Natural Disaster Developments
2025 Hurricane Season: Above-Normal Outlook
Forecasters warn of an above-average Atlantic hurricane season, with NOAA predicting a 60% chance of above-normal activity. Projections range from 13–19 named storms, 6–10 hurricanes, and 3–5 major hurricanes, increasing the likelihood of U.S. landfalls and rapid intensification events.
➡️ This could push property insurance premiums higher in coastal regions as carriers factor in potential losses.
Wildfires and Multi-Storm Events Stress Systems
Recent wildfires and back-to-back major storms are straining claims systems and underwriting capacity. Analysts warn this could trigger further premium hikes or coverage tightening, especially for CAT-exposed properties.
Flood Insurance Updates
FEMA’s updated flood insurance claims guidance, effective June 1, 2025, aims to simplify processes for NFIP Write Your Own companies and policyholders. Brokers should note potential downstream effects on premium calculations for flood-prone properties.
HUD Extends Flood Risk Waiver
HUD extended its temporary waiver of stricter flood elevation standards, affecting FHA-insured properties in flood hazard areas. This has implications for new construction projects and insurance requirements.
Casualty Insurance and Litigation Trends
Total Loss Vehicle Disputes
Insurers are facing lawsuits over how they calculate payouts for cars declared a total loss. Key issues include whether federal tax credits (like EV incentives) should factor into vehicle value and how quickly insurers must respond when policyholders demand an appraisal.
Clients with auto exposure may see carriers tighten appraisal deadlines and update policy language around ACV (Actual Cash Value) to avoid legal challenges.
Repair Claim Disputes on Labor Depreciation
Another hot topic is whether insurers should “depreciate” labor costs (along with materials) when settling property repair claims. One case was dismissed, but appeals are ongoing in higher courts. This could lead to revised claims handling practices and potential premium adjustments for property clients if carriers price in legal uncertainty.
Professional Liability Adjustments
New state-level data privacy laws are prompting carriers to adjust policy language and pricing in professional and executive liability lines. Brokers should anticipate further exclusions and higher premiums in response to cyber threats and regulatory changes.
Technology Shaping the Insurance Industry
AI and Agentic Tech Adoption
Insurers are accelerating adoption of AI and agentic tools for underwriting, claims, and risk assessment. However, independent agents need better data support to fully leverage these technologies for client outcomes.
Tech Trend Radar 2025
A joint report from ERGO and Munich Re spotlights AI agents, spatial intelligence, and predictive analytics as transformative forces in insurance, streamlining operations and enhancing risk modeling.
IoT and Real-Time Analytics
The use of IoT and real-time analytics continues to grow, improving risk prevention and driving more accurate pricing and claims handling.
Broker, Carrier, and Real Estate Market News
Broker and Carrier Moves
- Gallagher expanded into Malaysia and the Philippines.
- Lockton launched an ESG advisory practice to support clients managing sustainability risks.
Freight Market Shift
For the first time in two years, several LTL carriers reported tonnage declines in June—an indicator of shifting dynamics for logistics insurance.
Real Estate Insurance Costs Climb
Large real estate owners face rising premiums as risk mitigation and education become central to managing costs.
Safe Harbor for Brokers
A new U.S. House bill introduces safe harbor provisions for brokers selecting motor carriers, potentially lowering liability exposure for freight brokers meeting federal due diligence standards.
Takeaways for Brokers
- Hurricane and wildfire seasons could drive additional property rate hikes—prepare coastal clients now.
- Casualty rates and litigation exposure remain elevated—review client risk profiles proactively.
- AI and IoT adoption is no longer optional; brokers should embrace data-driven tools to stay competitive.
- Emerging legislation like safe harbor rules could shift broker liability standards in logistics.
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