Trends highlighted in the market as of Q2 2025
Excess & Umbrella Liability
What changed this quarter:
Umbrella pricing re-accelerated, reclaiming the top spot for increases among major lines. Across the market, most programs still renewed with some upward movement, but the pattern is bifurcated: primaries and low-excess layers saw the most firming, while mid-to-high layers were more competitive and often built with quota shares. Capacity continues to skew to the E&S market and is commonly deployed in thinner slices, making tower construction and timing more relevant and critical than in prior years.
Key drivers:
The litigation climate remains the dominant force—auto severity, social inflation, and persistent third‑party litigation funding continue to push up loss costs. CIAB highlighted record nuclear and “thermonuclear” verdict activity in 2024, with >$1B verdicts more than doubling year over year, cascading into umbrella layers. On the carrier side, reserving and claim close‑out behavior shifted ahead of mid‑year renewals, contributing to last‑minute capacity trims and pricing changes.
Keystone placement playbook:
1
Start marketing early and pre‑wire target carriers with detailed loss development narratives (especially for auto coverage), safety tech adoption, and defense counsel strategies.
2
Expect more layering and consider quota shares to unlock capacity and reduce single‑carrier concentration risk. It’s vital to price out options for attachment adjustments and small SIR increases as many carriers are trading price for higher retentions on challenging risks.
3
Have a surplus‑lines backstop ready for tough classes (habitational, transportation, products with severity exposure).
4
Anticipate late changes: hold contingency options for capacity gaps and budget swings.
Commercial Property
What changed this quarter:
Property momentum improved again. Rate relief was widespread, especially when it came to shared & layered placements, with many buyers realizing single to low‑double‑digit decreases and some programs down 20–40% after creative restructuring. Terms improved too—lower AOP/CAT deductibles, broader blanket availability, and higher sublimits returned as carriers re‑engaged.
Why its happening:
A healthier capital stack—CAT bonds and insurance-linked security inflows—plus 10–15% treaty reinsurance decreases in 2025 have supported carrier risk deployment. This is occurring despite elevated year-to-date catastrophe losses, indicating that capital supply is currently outpacing near‑term loss pressure.
Keystone placement playbook:
1
Test both incumbent and new capacity on every layer; consider de‑layering monoline primaries that priced aggressively in 2023–2024.
2
Trade deductible give‑backs or SIR for multi‑year rate commitments where feasible.
3
Use engineering updates, sensor data, and detailed secondary modifiers to win sublimit and valuation flexibility.
Directors & Officers (D&O)
What changed this quarter:
D&O continued to soften. CIAB records a sixth consecutive quarterly decrease, while CRC reports abundant capacity with the sharpest competition on excess layers. Carriers are trading on terms as well as price—more flexible retentions and broader grants are available, particularly for cleaner accounts.
Where carriers are leaning in:
Removal of antitrust exclusions, higher derivative investigation sublimits, broader books & records, lower retentions for healthcare regulatory coverage, and carve‑backs to standard exclusions are achievable in this cycle.
Watch-outs:
Macro volatility (e.g. tariffs/supply chain), rising bankruptcy activity (Chapter 11/7 insolvency), and AI‑related governance exposures are pulling underwriting back toward financial discipline. More distressed sectors such as healthcare and fintech/crypto, and accounts with adverse claims histories are not seeing the same benefits—expect tighter terms and higher retentions in those pockets.
Keystone placement playbook:
1
Package a forward‑looking financial story (margins, cash, covenants)
2
Highlight governance controls for AI disclosures, and show how broader T&C aligns with peer benchmarks.
3
Sequence markets so that excess coverage compression doesn’t erode lead terms.
Casualty & The Litigation Overhang
What changed this quarter:
Casualty lines remain the pressure point. Umbrella moved the most among major lines, and carriers stayed disciplined on primaries amid higher defense and indemnity spend. As CRC flagged in Q2, shifting reserving and claim close‑out patterns amongst carriers ahead of mid‑year, could create detrimental late‑stage surprises on some renewals.
What's driving it:
Record nuclear verdict activity in 2024 flowed through into 2025 pricing posture, with concentration in products, IP, and motor vehicle cases. Third‑party litigation funding keeps fueling severity; wage/hour and privacy exposures persist, with the heaviest impact in EPL.
Keystone placement playbook:
1
Create a stricter, written playbook for how litigated claims are handled so cases move faster, cost less, and avoid runaway verdicts
2
Document post‑incident investments (telematics, fleet safety, training), and consider higher retentions/SIRs paired with tower restructuring.
3
Use quota shares and new‑entrant facilities, if available, to relieve pressure on stressed layers; keep alternates ready for last‑minute capacity cuts.
Large Account Moderation
What changed this quarter:
Rate moderation was most visible on large accounts. CIAB shows large account average increases slowing materially from Q1, while small and midsized accounts ticked slightly higher. Externally, MarketScout similarly reports more tempered movement on jumbo/large accounts, supporting a broader theme of selective easing at scale.
Why its happening?
Competition is re‑emerging for well‑managed, loss‑aware buyers with professionalized risk management, clean loss runs, and credible engineering. Carrier appetite is cyclically improving as reinsurance terms loosen and capacity rotates toward middle and upper‑middle market risks—though stress classes still face friction.
Keystone placement playbook:
1
Lead with transparency—five‑year loss triangles, actuarial indications, and a clear exposure narrative.
2
Run multiple structures (single‑carrier vs. shared/layered) to create price tension.
3
Bundle adjacencies where smart (e.g., property + GL + excess) to trade breadth of relationship for terms/limits.
o Avoid over‑bundling if it reduces competition.
4
Use data‑driven benchmarking to frame target outcomes - it’s time to stop anchoring to 2023–2024 peaks
