The US property insurance market is entering the 2025 hurricane season with a mix of cautious optimism and watchful vigilance. According to industry leaders, carriers are balancing a much-needed recovery against the threat of another volatile year of natural disasters.
After years of grappling with a hardened market defined by rising premiums, tighter terms, and limited capacity, insureds are now navigating a more favorable rate and capacity landscape.
However, with roughly $83 billion in catastrophe losses already recorded in the first quarter alone, according to Aon, the sector remains on edge.
“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 (pictured below), 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.”
According to Giannisis, property insurance is finally showing more than just signs of recovery and stability after a very prolonged hard market.
After multiple years of inadequate underwriting results, insurers pushed through significant rate hikes. Those actions, combined with strategic reinsurance restructuring, have brought profitability back to carriers’ property divisions.
“We’re now seeing the reverse course: rate decreases, capacity increases, and a more stable outlook,” said Giannisis.
Nathan Baseman (pictured directly below), executive vice president of analytics at CAC Group, echoed this sentiment, noting 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,” said Baseman. “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 the top-line figures offer relief, insurers aren’t letting their guard down. What were once deemed "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,” said Giannisis.
Rather than a single, massive disaster like 2022's Hurricane Ian, recent years have delivered what Giannisis calls “death by a thousand cuts.” Last year alone, he said, there were 27 separate billion-dollar cat events in the US, most caused by severe convective storms.
At the same time, Baseman highlighted the increasing insurance impacts of growing residential and commercial development in cat-prone areas. In areas especially exposed to hail and tornado activity, particularly the central US, insurers have responded with steeper deductibles and revised policy terms.
“The build-out of communities in more tornado- and hail-prone areas has led to increased exposure and increased claims activity,” Baseman told Insurance Business. He added that carriers are monitoring their aggregation of risk and making adjustments not just in rate, but also in structures like deductibles.
However, Baseman hasn’t seen excessively “aggressive” action on aggregate risk. “It’s an area for them to expand their premium base,” he said. “I think they’re being cautious in balancing their exposure while pursuing new and emerging markets.”
Giannisis pointed out that rising deductibles have put pressure on insureds, who are responding by retaining more risk themselves, whether through captives, higher deductibles, or self-insured retentions.
These trends are helping fuel the rise of alternative risk transfer strategies, most notably parametric insurance. These products, which pay out based on event triggers like wind speed or earthquake magnitude rather than actual losses, 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.
Despite the current softening of the property insurance market, both Giannisis and Baseman emphasized 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,” said Giannisis. “They want to see that a client has solutions beyond just relying on insurance when something goes wrong.”
Baseman added that while the property market is currently in a favorable cycle, “if natural catastrophe activity tends to be a little more heightened, there may be some pullback.”
Meanwhile, meteorological predictions for the 2025 US hurricane season are cautiously optimistic. The consensus is for a “less active but still above-average” season.
But even as predictions point to a tamer wind season, the industry remains highly responsive to developing events.
“Another bad year of losses could stabilize those decreases or even reverse the trend,” said Giannisis. “It’s all eyes on the next few months.”
