P&C Report: 2025 Q3 Outlook

INTRODUCTION

The P&C market is currently experiencing stabilization as compared to recent years. In a reversal from recent trends, even admitted carriers are eager to preserve renewals and willing to compete on price for new business.  

A sluggish housing market is one reason for moderating rates, with more supply than demand in many regions. An April 2025 Redfin analysis found 500,000 more U.S. home sellers than buyers—the largest gap in over a decade, which may drive prices down in some markets.  

As admitted carriers ramp up efforts to attract new business, E&S providers face intensified competition. Traditional insurers have stabilized their P&C operations and are actively expanding their portfolios. Consequently, rates, terms and conditions (T&C) are increasingly market-driven, contributing to the overall stabilization of the market.  

There is, however, a caveat to this recent trend of a stabilizing P&C market. Chaotic weather patterns continue, elevating risk in coastal states for hurricanes and western U.S. states and Canadian provinces for wildfires. The death toll from catastrophic July floods in Texas was nearly 135 as of July 16, with some people still missing. Some parts of the state received as much as 15 inches of rain in less than two days. 

Additionally, the 2024 hurricane season saw 18 named storms, including 11 hurricanes (winds of 74 mph or higher) and five major hurricanes (category 3 or greater with winds of 111 mph or higher). Had storms like Helene and Milton made landfall in more populated areas of the Southeast U.S., the market may look very different right now.  

LA wildfire impact less than anticipated   

As tragic as the catastrophic wildfires that devastated southern California in January 2025 were, the industry impact from the mild wildfire year of 2024 was greater. The original prediction from industry leaders was that the Los Angeles wildfires earlier this year would force carriers to limit or be more selective in their available capacity, but that has yet to happen.   

There are several reasons for this. The leading reason: carriers and market stakeholders have spent at least 10 years making financial and operational investments to better understand wildfires, from how they behave to outlining risk mitigation best practices for Personal Insurance. Burns & Wilcox began working with Wildfire Defense Systems a few years ago to promote and understand wildfire risk mitigation strategies, launching a wave of home hardening activities that are widely used and embraced.   

Perhaps the most notable industry outcome of the southern California wildfires is that they were not limited to the hills surrounding the greater Los Angeles area, but that they spread to such communities as Palisades and Malibu along the Pacific coastline. That is an important consideration when predicting the impact of future fires.   

Ongoing and emerging industry trends:

• Legal and economic challenges: Continued growth in litigation financing, jury shopping, and the influence of a well-coordinated plaintiff’s bar—combined with economic and social inflation—are driving up loss costs. For example, $1 million policy limits may fall short as building material costs continue to rise. Real estate services company JLL projected a 5–7% increase in construction costs in 2025. 
• TVM: The industry is increasingly adopting the time value of money (TVM) principle—recognizing that money today is more valuable than the same amount in the future. Investing in operational efficiency now can create long-term opportunities. 
• Thermonuclear verdicts: While nuclear verdicts—jury awards exceeding $10 million—have become a growing concern for insurers, a new level of exposure is emerging. Thermonuclear verdicts, defined as jury awards exceeding $100 million, are increasingly common in Product Liability, Commercial Auto, and Medical Malpractice cases. These extreme awards occur in state courts 90% of the time, with the top states including California, Florida, New York, Texas, Georgia, Illinois, Pennsylvania, Washington, Missouri, and Ohio, according to Litigation Commentary & Review, April 2025. 
• Public protest exposure: There are rising concerns around liability stemming from protests and large urban gatherings. Carriers are increasingly requiring exclusions for actions of law enforcement, border security, and other government entities due to the heightened risk of violence or property damage. 
• Tariff uncertainty: The ongoing debate over federal tariffs is creating economic unease. This uncertainty is causing consumers to pull back on spending and businesses to delay hiring or capital investments. 
• Technology and scalability: As capacity grows from non-admitted carriers, some E&S providers are struggling to keep pace with tech and AI expectations. Admitted carriers are targeting E&S acquisitions to scale more efficiently—while some E&S carriers are showing greater willingness to be acquired. 
• Cyber threats: Cybercriminal activity targeting the insurance industry is on the rise. The group Scattered Spider is responsible for 20–25% of attacks on finance and insurance organizations. Philadelphia Insurance Co. recently experienced a multi-week “security incident,” highlighting the ongoing risk. 

RATES

As mentioned above, rates across many P&C sectors have largely moderated, especially in the Personal Insurance space. Many insureds can expect flat, or lower renewal rates if absent of any recent claims. Most large carriers are adding to their books of business by offering competitive rates to attract new clients. Despite this trend, carriers generally remain unwilling to reduce deductibles. 

Some areas remain challenged, such as Auto, Habitational and Liquor, but 2025 is shaping up to be an overall softer rate environment. Still, a single significant hurricane in a populated area in the Gulf or Atlantic coast could trigger immediate rate shifts on a national level. 

CAPACITY

As rates have moderated, capacity has expanded outside of stressed sectors such as Auto, Habitational, and Hospitality (especially as it relates to Liquor Liability and firearm exposed accounts). Insureds with recent claims, and or higher risk profiles, will find more availability in the E&S space as those clients with more pristine profiles will continue to be serviced by the traditional market.  

More Property aggregate has become available to traditional carriers than in the recent past, with the market softening in parts of the Carolinas, Louisiana, and Florida, but hard spots in high-risk areas remain. Burns & Wilcox has the tools and relationships to find capacity for these riskier areas.  

Auto Liability policies within the trucking and specialty auto sector as well as those with large fleets are yet another challenge; however, with longevity and global reach of the Burns & Wilcox Transportation Practice Group, we are well poised to find solutions. 

TERMS & CONDITIONS (T&C)

Diligence and thoughtful underwriting remain commonplace resulting in continued customized T&C to reflect underlying exposure. T&C will continue to become stricter with carriers continuing to underwrite risks with greater accuracy from third party data, improved technologies, and reliance on Artificial Intelligence (AI). Insureds have accepted the presence of these evolving T&C given the availability of more data that provide context and support real-time analysis. Policy T&C are fluid and dynamic reflecting advances carriers are making at rapid speed. 

Contributor: Paul G. Smith, Group Senior Vice President, H.W. Kaufman Group, New York, New York 

FORECASTS BY LINE OF BUSINESS

During the Burns & Wilcox P&C Market Outlook: Q3 2025 webinar hosted on July 10, 2025, our industry-leading subject matter experts delivered valuable insights into the evolving insurance landscape.  

In the following, our experts delve deeper into specific sectors within P&C, explore trends, and share outlooks for the year. 

Personal Insurance:

In Q2 2025, the Canadian Residential Property Insurance market remained stable, with rates in many regions continuing to sit surprisingly low. Some further softening was observed in low-risk areas, where competition remains active. However, high-risk regions continue to feel the aftershocks of the record-setting catastrophic events of 2024, compounded by ongoing severe weather throughout parts of the country. 

Elevated exposure to wildfires, hailstorms, flooding, and earthquakes has triggered an increase in non-renewal activity within the standard market, pushing more business into the specialty insurance space. As we move into Q3, we anticipate continued upward pressure on rates and tighter underwriting criteria for properties located in high-risk zones. 

With wildfire season underway, properties with poor wildfire mapping could be particularly vulnerable to shifting insurer appetites. Standard markets are demonstrating lower tolerance for wildfire exposure, making early action critical for homeowners. Engaging with specialty markets in advance of any nearby wildfire activity is essential to avoid last-minute coverage challenges or outright declinations. In these scenarios, strong risk mitigation measures—such as defensible space, hardscaping, and clear documentation—are more critical than ever in securing terms. 

Ongoing inflation and rising reconstruction costs continue to strain affordability and available capacity in the traditional market, especially for high-value homes. These pressures are driving more business toward MGAs, who can offer flexible and customized solutions. As a result, demand is increasing not only for high-net-worth homeowner products but also for rental and income-generating properties. 

Homes with prior claims, unique or custom structures, high insured values, or non-traditional uses—such as short-term rentals, multi-lender ownership, or home-based businesses—frequently fall outside the risk appetite of standard insurers. Once a policy is denied or non-renewed, re-entering the standard market can be extremely difficult. 

We expect these trends to persist throughout Q3: 

• Continued rate firming and underwriting scrutiny in catastrophe-prone areas 
• Relatively stable pricing in low-risk regions 
• Ongoing growth in specialty market demand due to constrained capacity and eligibility hurdles in the standard market 

To address these challenges, Burns & Wilcox has introduced a new specialty homeowners’ product, designed to support the rising demand for hard-to-place residential risks. Backed by expert underwriting and dedicated service, this offering positions us well to help brokers and clients navigate an increasingly complex property insurance environment. 

Contributor: Michelle Allemang, Manager, British Columbia, National Product Leader, Personal Insurance, Burns & Wilcox, Vancouver, BC 

Commercial Insurance:

As we enter the second half of the year, the Canadian Commercial Insurance landscape remains characterized by ample capacity and intense competition. While standard markets are writing some harder-to-place risks, Burns & Wilcox specializes in delivering fast, flexible solutions for complex and niche exposures.   

Over the past quarter, we have expanded our product offerings and are excited to introduce several new, targeted programs for hard-to-place commercial businesses, including:   

• Retail Vape Stores: Features include full Commercial General Liability (CGL) and Property coverage, competitive pricing, and valuable policy extensions. Convenience stores that sell vape products are also eligible for coverage. $2 million CGL limits are available.   
• Security Services: CGL and Errors & Omissions (E&O) Package policies, targeting various services such as, but not limited to: Patrol & Guard, Alarm Installation, Locksmiths, and Bodyguards. Premiums start at $850.  
• Contractors: Designed for small to mid-size contractors, this program features low premiums starting at $450. Target classes include Landscapers, Janitors, Excavators, General Repair Specialists, Electricians and more. CGL limits up to $5 million (higher limits available upon request). New ventures are also accepted.  
• Welders: Includes Oil & Gas Contractors, Supervisors/Inspectors, Mobile Welders and more. Premiums start at $1190. CGL limits up to $5 million (higher limits available upon request).   

What sets these programs apart is our competitive pricing, broad coverage, and underwriting authority, which means faster turnaround times and no delays associated with Offer and Accept (O&A) markets or London.    

Additionally, we have expanded our endorsement offerings to include the following:      

• Full sewer backup limits     
• Property extensions, including building by-laws, extra expense, inflation protection, and glass coverage     
• Casualty extensions, including Employee Benefits, Product Recall, Sudden & Accidental Pollution, and E&O    
• Add-on products for Cyber and Legal Expenses      

Burns & Wilcox remains committed to developing innovative products, offering competitive pricing strategies, and maintaining high service standards to ensure brokers receive timely, expert support—helping them win and retain business in a competitive market.  

Contributor: Patricia Sheridan, Associate Managing Director, Burns & Wilcox, Toronto, ON 

Construction    

The Construction Insurance market remains soft, with ongoing pressure on rates and capacity. Rising uncertainty around tariffs and inflation is putting additional strain on supply chains and material costs, which could significantly affect the construction industry. We are actively monitoring these developments and their impact on insurance needs.  

Despite the challenges, our strong product offerings and commitment to service excellence make us a reliable partner for construction risks of all sizes. We are also enhancing our Builder’s Risk program, which will bring added value to brokers and clients. 

Contributor: Steven Hrab, Director, Construction, Burns & Wilcox, Toronto, ON 

Professional Liability:

The Professional Liability Insurance market continues to adapt to the increasing challenges of the soft market by partnering with new markets and developing better solutions for our broking partners, both in terms of coverage and pricing.  

There is growing demand for tailored coverage in Architects & Engineers (A&E) and Miscellaneous Errors & Omissions (E&O). To address these needs, Burns & Wilcox has been collaborating closely with both our established and new partner markets, enhancing our ability to deliver innovative and competitive solutions that address the unique exposures of these professional industries. Our in-house capabilities have received positive feedback on both coverage and pricing, as we can offer products with fewer exclusions, resulting in more comprehensive coverage.  

This quarter, we continue to see new businesses in the health and wellness sector. We remain committed to working with our existing markets to provide exceptional coverage for our prospects. Additionally, we have established new market relationships to offer competitive pricing in the current environment. 

Contributor: Danion Beckford, Senior Underwriter, Professional Liability, Burns & Wilcox, Toronto, ON    

Environmental Insurance:

The Canadian Environmental Impairment Liability (EIL) market remained soft through Q2 and is expected to continue along this path in Q3. New MGA entrants in the Environmental space have certainly contributed to the downward pressure on rates. Furthermore, some contractors and, to a lesser degree, certain classes of premises risks, such as manufacturing and industrial, are being impacted by ongoing amalgamations, acquisitions, and, in some cases, bankruptcies (perhaps reflecting the current financial market climate).  

Robust competition on renewals was observed in Q2 and is expected to continue. That said, cultivated and well-managed relationships between underwriters and brokers remain of paramount importance and play a critical role in renewal retention. New business influx improved later in Q2, but premium targets remain very thin on rates.   

We do not anticipate any material or macro changes in the current Environmental Insurance market trends this quarter. While risk appetites remain conservative, there is an uptick, whether in capacity for a particular class of risk or risk profiles in general. This is a welcome improvement as underwriters and brokers collaborate to place business under stringent market conditions.  

Renewals will continue to come under competition, but again, broker-underwriter relationships will play a stabilizing role, along with sound underwriting and adaptive pricing. The previously customary Q4 big push has been observed as beginning earlier, i.e., early in Q3. The market will likely trend similarly in Q3 2025, but again, under significant rate pressure.  

Contributor: Karim Jaroudi, Manager, Environmental, Burns & Wilcox, Toronto, ON     

Transportation Insurance:

As we move into the second half of 2025, the Transportation and Logistics sector is showing measured improvement, although momentum varies by region and operating class. While core capacity has started to loosen in some areas, bottlenecks remain for specialized freight and cross-border operations, where compliance requirements continue to shift. 

The insurance side remains cautious. Carriers are closely watching trends, especially those related to cargo theft and larger-than-expected settlements, which are on the rise. That said, we are starting to see a shift: fleets with a clean track record and solid safety programs are getting more attention from markets, and in some cases, more favorable treatment when it comes to rates. 

Burns & Wilcox is committed to helping broker partners stay ahead in a complex and fast-moving market. We offer flexible solutions tailored to fleets of all sizes, logistics providers, and last-mile operators, supported by responsive underwriting and deep industry expertise. On-demand cargo coverage, offered through our partnership with Loadsure, continues to be a strong fit for ad hoc and fast-turn freight. Whether you are navigating shifting compliance demands or aiming to stand out with proactive risk management, Burns & Wilcox delivers the structure, support, and strategic guidance needed to help you succeed. 

Contributor: Fernando Batista, Manager, Transportation, Burns & Wilcox, Toronto, ON    

LONDON MARKET UPDATE

Property   

The London Property insurance market is showing signs of stabilization. Coastal areas continue to experience notable rate reductions, while inland regions are comparatively steady, though still subject to minor rate softening.  

Pricing in the domestic market remains competitive. However, increased opportunities are emerging in the small and medium-sized (SME) non-CAT segment, with the London-based Burns & Wilcox Global Solutions helping to develop a facility in this sector.  

Many of the London underwriters are beginning to ease underwriting guidelines, particularly around Construction, Occupancy, Protection, Exposure (COPE) requirements, and deductible structures.  

The E&S Property Binder market conditions have continued softening throughout Q2 2025, becoming more widespread across southern and southeast wind-exposed states. Competition has increased, and there does not appear to be a deceleration as we enter the wind season.  

Traditional private Flood Insurance remains competitive; however, our Flood Practice Group has recently observed some highly constrained or lost markets, particularly among regional players, following the April and June renewal periods. Parametric Flood offerings are starting to gain momentum, with residential properties now eligible with some markets, creating additional competition. Fortunately, price adequacy remains strong, allowing for rate reductions while maintaining strong deductibles and terms.  

With the National Oceanic and Atmospheric Administration (NOAA) predicting an above-normal 2025 Atlantic Hurricane Season, caution is sensible. Secondary perils and worldwide political events continue to challenge the market and create additional uncertainty.  

Lloyd’s syndicates have entered the annual business planning period, during which they forecast expectations for 2026. If a major hurricane occurs, where will rates be next year? Without a hurricane, will rates continue to fall next year? At this point, no one knows, but all we can do is continue to be a strong partner and focus on maintaining strong risk selection and underwriting integrity.  

Burns & Wilcox Global Solutions continues to work with technology and syndicate partners to better understand exposures and how to future-proof our Property portfolio. The agility of our syndicate partners, being able to adjust products to our needs, should not be underestimated as the market continues its current trajectory.  

Excess Casualty   

London carriers have maintained firm pricing and focused capacity in the U.S. Excess Liability space. Rate on Line (ROL) has increased by approximately 10% year-over-year, with individual line sizes under $10 million becoming more common as underwriters tighten their focus on sectors such as Automotive and PFAS exposures. Continued contraction of lead capacity, with $2–3 million often replacing previous $5 million tranches—a response to elevated “nuclear verdict” risk; thermonuclear verdicts (>$100 million) surged by 27% in 2023, intensifying underwriter caution.  

Despite strong pricing discipline, there are signs of cautious moderation: AM Best downgraded its outlook on the London market insurance to “stable,” citing early signs of rate softening and growing concerns over climate and litigation risk exposure. That said, U.S. E&S premium growth still supports London’s appetite, with carriers deploying capital actively to fill gaps left by withdrawing U.S.-admitted insurers, particularly in high-hazard classes such as Auto, Cannabis, and Cyber. 

Contributor: Paul Greensmith, Chief Executive Officer, H.W. Kaufman Group International 

CONCLUSION

While the market as a whole has softened, several sectors in the P&C market such as Auto Liability, Habitational, Hospitality, and Liquor Liability remain a challenge. This serves as a reminder that there will always be demand for the E&S market. While standard carriers are becoming more competitive on certain lines of business, they continue to shy away from the riskiest sectors. Clients should therefore continue to rely upon the expertise from Burns & Wilcox to secure hard-to-place coverage.  

It is important to note that while insureds have more information and resources to engage in strategies that mitigate risks, carriers have more technological tools available to review and underwrite risks in both Commercial and Personal lines. Information is everywhere—from AI and online data to advanced mapping tools—all of which underwriters use to make overall capacity and underwriting decisions.  

Tailored coverages are increasingly common in all lines with firm underwriting and bespoke Terms and Conditions common across all sectors throughout North America. Burns & Wilcox continues to provide the local, regional, national, and global expertise to address clients’ needs.  

As we embark on the last half of 2025, the insurance market continues to face rising claims costs driven by social inflation, excessive jury awards, legal expenses, and increased litigation financing which in our view will continue to increase pricing pressures across most sectors. 

Finally, the early part of the hurricane storm season has been mild, but one or more storms that result in a significant number of liability or property claims, will shift the P&C market even further. Regardless of the future, Burns & Wilcox has the unique programs, industry connections, and collective knowledge to provide the solutions that brokers, agents, and clients need in uncertain times. 

Contributor: Paul G. Smith, Group Senior Vice President, H.W. Kaufman Group, New York, New York 

Disclaimer: The above information has been prepared solely for the purpose of sharing general information regarding insurance and business practice management issues. These are just our opinions and are not intended to constitute legal advice or a determination on issues of coverage.