Lockton: US commercial P&C buyers enjoying most favorable conditions in five years

By Michael Loney

June 26 - (The Insurer) - Conditions remain strong for U.S. commercial property casualty insurance, but economic uncertainty means it is “a pivotal moment for both buyers and insurers”, Lockton has said.

In the latest edition of the Lockton Market Update, the U.S. independent broker argued that conditions for U.S. commercial insurance buyers are currently at their most favourable in the past five to six years.

“However, the significant uncertainty surrounding the broader economy — and its potential ripple effects on the insurance market — makes this a pivotal moment for both buyers and insurers,” the broker said.

Lockton said that conditions remain strong for insurers.

“Underwriting discipline is holding, investment income is rising thanks to higher bond yields, and many carriers are benefiting from years of rate hardening and portfolio optimisation,” the report said.

Rates continue to fall across multiple lines as insurers compete for existing and new business, particularly in property, financial lines and specialty coverages.

The most notable exception to this is third-party liability, where pricing and capacity challenges persist.

“What truly defines this moment, however, is the depth and breadth of uncertainty surrounding the economy and its potential impact on the insurance marketplace. There are more questions than answers about several important matters — trade, inflation, tax policy, debt, climate volatility, geopolitical risk, regulatory shifts, and the macroeconomic landscape,” the report said.

In property insurance, most buyers are benefiting from strong competition and ample capacity as the market continues to soften, Lockton said.

Lockton’s data shows that median property rates fell 1.3% in the first quarter of 2025.

In the liability insurance market, conditions generally remain predictable for most buyers.

Lockton data shows median lead umbrella price per million rose 9.6% in the first quarter, while median excess casualty price per million rose 10.8%.

“Social inflation remains the preeminent challenge facing liability insurers and buyers today, resulting in accelerated loss rates and higher premiums,” the report said.

The D&O market for public companies remains competitive, with buyers able to maintain or slightly improve upon “already aggressive renewal results”, according to Lockton.

“In some cases, carriers are pushing back as pricing approaches lows last seen a decade ago,” the report said. “Capacity is slowly exiting the market, primarily due to low prices and some insurers’ poor experience writing excess layers.”