US Property Insurance Market Enters 2025 Hurricane Season with Cautious Optimism
The US property insurance market is heading into the 2025 hurricane season with a delicate balance between cautious optimism and watchful vigilance. Industry leaders indicate that carriers are navigating a much-needed recovery while remaining alert to the threat of another volatile year of natural disasters.
After years of dealing with a hardened market characterized by rising premiums, tighter terms, and limited capacity, insureds are now experiencing a more favorable rate and capacity landscape. However, the sector remains on edge due to significant catastrophe losses. According to Aon, approximately $83 billion in catastrophe losses were recorded in the first quarter alone.
“We’re already off to a tough start this year with wildfires, estimated to result in around $40 billion in insured losses,” said Blake Giannisis, Executive Vice President and North American Property Practice Leader at Hub International. “The popular phrase is that we’re in a ‘wait and see’ stance.”
The property insurance market is showing signs of recovery after a prolonged hard market. Giannisis noted that after multiple years of inadequate underwriting results, insurers implemented significant rate hikes, which, combined with strategic reinsurance restructuring, have restored profitability to carriers’ property divisions. “We’re now seeing the reverse course: rate decreases, capacity increases, and a more stable outlook,” Giannisis explained.
Nathan Baseman, Executive Vice President of Analytics at CAC Group, echoed this sentiment, stating that the marketplace has “gotten considerably softer” in recent months despite persistent threats like wildfires and severe convective storms. “We’re seeing significant rate decreases occurring there, even in the face of increased tornado and hail activity,” Baseman said. “There’s been a lot of capacity coming in, and certainly, the reinsurance rates at the beginning of the year were more favorable than a lot of people anticipated.”
While top-line figures offer relief, insurers remain cautious. What were once considered “secondary perils” are now treated with the same scrutiny as primary perils like hurricanes, flooding, and earthquakes. “Wildfires, severe convective storms, and just severe weather in general, thunderstorms, freezes, etc., are front and center,” Giannisis stated.
Recent years have seen what Giannisis calls “death by a thousand cuts” rather than a single massive disaster. Last year alone, there were 27 separate billion-dollar cat events in the US, most caused by severe convective storms. Baseman highlighted the increasing insurance impacts of growing residential and commercial development in cat-prone areas, particularly in the central US, where insurers have responded with steeper deductibles and revised policy terms.
The trends are driving the rise of alternative risk transfer strategies, most notably parametric insurance. These products offer quicker access to liquidity and the ability to cover business interruptions that fall outside traditional coverage. While still largely supplemental, Giannisis said parametric insurance is gaining traction among clients eager to manage increasingly unpredictable weather risks.
As the 2025 hurricane season approaches, industry experts emphasize the need for differentiation in client submissions. Favorable rates and increased capacity won’t benefit everyone equally. “Underwriters are focused on proper valuations, good insurance architecture, loss control, loss mitigation, and business continuity plans,” Giannisis said. “They want to see that a client has solutions beyond just relying on insurance when something goes wrong.”
Meteorological predictions for the 2025 US hurricane season are cautiously optimistic, forecasting a “less active but still above-average” season. However, the industry remains highly responsive to developing events. “Another bad year of losses could stabilize those decreases or even reverse the trend,” Giannisis warned. “It’s all eyes on the next few months.”
