WTW: US shared and layered property rates down as much as 20%

By David Bull

May 5 - (The Insurer) - In its latest Marketplace Realities report, WTW said that the U.S. property insurance market transitioned to a more competitive environment in 2024, especially for large commercial risks, a trend expected to continue in 2025 as oversupply of capacity drives rate relief.

This will lead to favorable renewal conditions for many buyers, said the broker.

“However, the market remains bifurcated, with intense competition in certain segments while others remain relatively stable,” the report observed.

WTW said that non-cat exposed property is renewing in the range of 5% down to 5% up; cat-exposed at -10% to +10%; single-carrier placements are -2.5% to +5%; and shared and layered structures are pricing flat to down by as much as 20%.

The report said that last year insurers initially resisted pressure to flatten renewal rates, but they were forced to change their stance as competition intensified.

Capacity oversupply, particularly for shared and layered programs, meant there was “significant rate relief,” especially by Q4 2024.

“The bifurcation in the market was most evident during the 2024 renewals, with insureds who faced steep rate increases and restrictive terms in 2023 receiving the most competitive rate relief, particularly in the large-premium shared and layered market.

“In contrast, insureds with stable terms in 2023 had limited opportunities to improve their programs in 2024, as demonstrated by the single-carrier market, which experienced flat to low single-digit rate increases,” said the report.

The company highlighted the impact of ample reinsurance capacity that has enabled direct insurers to buy higher coverage levels at flat to lower rates during the January 1 and April 1 cat renewals, while noting that last year’s hurricane season was “active but manageable” for insurers.

Looking ahead, WTW noted that forecasters are predicting an above-average 2025 Atlantic hurricane season, while the imposition of wide-ranging tariffs is expected to disrupt supply chains and increase import costs, which could lead to a return of inflation in post-event replacement costs.