Casualty The real estate sector remains one of the most difficult for casualty coverage. In 2024, the market faced significant challenges driven by rising claims costs, inflation and third-party litigation funding (TPLF), contributing to growing nuclear verdicts. › Primary General Liability rate increases ranged from 10% to 15%, and excess towers saw increases from mid-teens to 20%, with further rises expected in 2025, especially for complex risks or accounts with adverse claims development. Capacity in both primary and excess spaces remains a challenge, with carriers reducing limits based on exposure and jurisdiction. › Social inflation, driving higher legal fees, larger settlements and more frequent litigation, makes high-risk states like California, Texas and Florida tougher jurisdictions for competitive and affordable coverage. Carriers are adopting stricter underwriting guidelines and limiting exposure in high-risk areas, making coverage harder to obtain. › Coverage limitations and exclusions are also factors for many real estate accounts. Markets entertaining schedules with fewer than 1,000 units are applying sub-limits on assault and battery (A&B) and sexual abuse and molestation (SAM). Some carriers are excluding these coverages, particularly in states with high A&B risks, and are also excluding firearms. Human trafficking and habitability concerns are becoming more prominent in underwriting, regardless of location. › Due to the complex nature of real estate risks, market capacity challenges and nuclear verdicts, carriers are focusing more on claims history, emphasizing understanding open claims and extensive loss history. Comprehensive submissions, including thorough risk details, risk transfer language, vendor/tenant information, and security and property management protocols, are crucial for priority review.
Hospitality Price, terms and conditions vary widely depending on the venue. For primary coverage in 2025, the market is expected to resemble 2024, with significant challenges for liquor-driven businesses, particularly those with high liquor sales. A&B claims, combined with rising legal verdicts and settlements, have led many insurers to apply exclusions, limitations and sub-limits to reduce exposure. States with strict liquor liability laws, like South Carolina, remain difficult markets. The trend of businesses moving into the Excess & Surplus (E&S) market due to increased risks, including A&B and human trafficking, is likely to continue into 2025, driving up costs and creating more competition for limited capacity.
Professional Lines Trends have softened over the past few years, continuing into 2024 and 2025. Premiums are down year over year, and retentions are at historic lows. This trend is driven by good property investment performance, fewer losses in real estate management liability and an influx of new carriers entering the market. This has created an oversupply of limit capacity, particularly for real estate-oriented management liability products. Despite concerns about rising interest rates and potential property defaults, soft market conditions are expected to persist, especially for first-time buyers or insureds with general partnership exposure seeking private D&O policies.
Overall, the casualty insurance market in 2024 faced rising costs, increasing litigation and ongoing inflationary pressures, leading to tougher underwriting, rising premiums and stricter coverage conditions. Insurers are focused on managing exposures in high-risk sectors, particularly real estate and hospitality, while navigating the challenges posed by legal inflation and claims development. For 2025, insurers will likely continue to increase rates, particularly in high-exposure areas, and seek growth opportunities in the surplus lines market as they adapt to the changing landscape of risk and claims management.
Back to Contents »
© 2025 Unison Risk Advisors TM . All rights reserved.
Made with FlippingBook Digital Publishing Software