Tools + Intel.

In Q2 2025, excess casualty market rates largely stabilized. Incumbent markets continued to push for above-trend rates; however, competitive dynamics often led to better end-result pricing or quota shared options, particularly in mid to high excess layers. Surplus lines solutions remained in high demand due to rate and form flexibility, with casualty lines driving overall premium growth. Casualty premiums are now expected to make up 50% or more of total E&S premium volume, underscoring the line’s continued value in the market.

Despite competition, hard market conditions persisted due to little change in the underlying risk and litigation environment. Carriers remain focused on underwriting discipline in the face of auto frequency and excess liability severity trends. Coverage limitations are not unusual for tough risks, and greater upward rate pressure was observed on primary programs, with markets citing the need due to increased defense costs and indemnity payments.

Dramatic shifts in loss valuation were observed in the run-up to mid-year renewals. Claims reporting, carrier reserves, and close-out patterns appear to have changed during the post-COVID catch-up, likely in response to the current litigation environment and reported reserving inadequacies. This change should be considered and proactively managed versus sole reliance on expectations set during early renewal discussions. Last minute declinations, capacity cuts and price increases may create coverage gaps and/or unbudgeted insurance costs.

Entering the second half of 2025, the market will remain characterized by risk and rate segmentation, demanding program creativity and assertive marketing. While underlying loss trends continue to warrant caution, especially in auto liability, habitational risks, and industries attracting frequent litigation, many insureds are utilizing additional tools, data, and market leverage compared to previous years in an effort to improve pricing and coverage outcomes.