The property insurance market continued its downward trajectory in the first quarter of 2025, despite significant wildfire losses estimated at $32–$38 billion. Property rates declined steadily at a pace of approximately 1% to 2% per month. During Q1, an average of 63% of accounts renewed at flat or reduced rates, while an average of 28% saw modest single-digit increases. The extent of rate reductions varied based on account characteristics and loss history, with some accounts achieving reductions in the single digits and others realizing decreases of up to 40%.

Market competition has also driven meaningful improvements in terms and conditions. Insurers have responded by lowering deductibles, increasing sublimits, broadening policy language, and offering more competitive pricing. While the focus on valuation has somewhat moderated, carriers remain attentive to the potential implications of ongoing tariff discussions.

Additionally, the property market has benefited from a notable increase in alternative capital sources, particularly through insurance-linked securities (ILS) and catastrophe bonds. This influx has played a key role in supporting market stability. We anticipate that the downward trajectory will continue for the foreseeable future.