By David Bull

July 17 - (The Insurer) - CRC Group's latest REDY data has shown contrasting dynamics in the U.S. P&C market, with bigger declines in property pricing in the second quarter but sustained double-digit increases for umbrella/excess casualty business.

Renewal pricing for property accelerated from a reduction of 2.6% in March to 3.9% in April and 6.0% in May, before easing to 5.5% in June.

By June, 79% of accounts experienced a renewal with no increase; 17% were up 1% to 9%; 3% were up 10% to 19%; and 1% faced an increase of 20% or more.

“The property market continued to soften in Q2 2025 as we have seen rates reduce by an average 5% for the past three months, despite elevated catastrophe losses,” said the broker in commentary published with the updated index.

It noted that insured global property losses in the first half are estimated at $70 billion to $90 billion, including $20 billion to $30 billion from California wildfires and $20 billion from severe convective storms, while the recent flooding in Texas has added uncertainty.

Meanwhile, capital inflows through catastrophe bonds and other ILS instruments are expanding available capacity, with a softening reinsurance market allowing insurers to adopt “a more aggressive posture on pricing and risk deployment”, said CRC.

This has helped bring widespread rate relief, especially on shared and layered placements, for which most clients are achieving average rate decreases of 5% to 15%, with select programs securing higher reductions of 20% to 40% or more.

The broker said that program restructuring is playing a key role in increasing competitive pressure, but rate reductions on single-carrier placements are more measured, in the single to low double-digit range.

Terms and conditions are also moving in favour of buyers, including reductions in all other perils and cat deductibles, increased sub-limits and the availability of blanket coverage.

“Both new and incumbent markets are expanding participation across primary and excess layers, creating a favourable environment to enhance coverage while reducing total cost of risk,” CRC said.

UMBRELLA/EXCESS SUSTAINS DOUBLE-DIGIT INCREASES

In contrast, second-quarter umbrella/excess pricing dynamics were broadly consistent with what had been seen across the previous four quarters, during which monthly average renewal change ranged from up 11.6% to up 16.2%.

In April, the average increase was 12.7%, picking up to 14.2% in May before easing back to 13.4% in June.

In commentary, CRC said excess casualty rates “largely stabilised” in the second quarter.

“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,” the broker observed.

It estimated that casualty premiums now contribute 50% or more of total E&S premium volume.

CRC said that despite competition, hard market conditions continued because there has been little change in the underlying risk and litigation environment, with carriers focused on underwriting discipline in response to 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 defence costs and indemnity payments,” said the commentary.

It highlighted “dramatic shifts” in loss valuation in the run-up to mid-year renewals and warned of the potential for last-minute declinations, cuts in capacity and price increases that could lead to gaps in coverage as well as unbudgeted insurance costs.

“Entering the second half of 2025, the market will remain characterised 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 utilising additional tools, data, and market leverage compared to previous years in an effort to improve pricing and coverage outcomes,” said CRC.