Latest Insurance Trends: What Business Owners Need To Know
Staying ahead of insurance premium trends is critical for managing business expenses. According to the Ivans Index, commercial insurance rates have trended downward over the past three quarters after recent year-over-year increases. The Ivans Index is a data-driven report measuring the premium rate changes for the most popular business insurance policies.
The quarterly Ivans Index, released in October 2025, reiterated the downward trend across many commercial insurance lines. Depending on your industry’s risks, these could signal savings or challenges.
Pricing across the major insurance lines
Ivans spotlighted premium renewal rates across several standard commercial lines. Month-over-month movement showed a marginal shift, but quarter-over-quarter movement showed a downward trend across most lines (exceptions are general liability and workers’ compensation).
The Ivans Index reported the following rate changes from the second quarter of 2025 to the third quarter of 2025:
| Business line | Q2 2025 | Q3 2025 |
| Commercial auto | 8.43% | 7.6% |
| Business owners policy | 7.87% | 7.55% |
| General liability | 4.66% | 5.89% |
| Commercial property | 7.89% | 7.64% |
| Umbrella | 9.07% | 8.99% |
| Workers’ compensation | -1.75% | -1.42% |
Cyber liability insurance pricing
According to the most recent Fitch Ratings, stand-alone cyber liability policy premiums declined by 6% in 2024 and have continued to fall for the second straight year into 2025. Weaker pricing and fewer policies led to the decline, according to Fitch.
Nonadmitted carriers have created competition in cyber insurance, but also risk
More nonadmitted carriers are writing cyber insurance policies, increasing the competition in the market. However, nonadmitted carriers aren’t backed or regulated by the states, allowing them to set premiums and exclusions without scrutiny. If a nonadmitted carrier doesn’t price appropriately, it could go bankrupt. Without the state to bail it out, its policies would become null, and policyholders would have no coverage. Decide if you’re OK with the risks before you sign.
Evolving cyber trends affect pricing
Cyber insurance claims are still evolving, and it’s difficult to price policy trends accurately. Technological advancements, like artificial intelligence, can affect market risk. Cyberattacks are complex and harder to model than traditional risks, like weather patterns and natural disasters. Experts anticipate that cyber liability policies will continue to decline, barring a significant event.
For example, a July 2025 Fitch report warned that geopolitical conflict has heightened public financial cyber risk from state-affiliated actors and hacktivist groups targeting critical infrastructure. Public financial sectors, health care, agriculture and utilities are high-profile targets that can significantly impact people and businesses. As cyberattacks evolve due to new technologies, changing attack strategies, and shifting geopolitical climates, so will cyber liability insurance rates and the ease of obtaining policies.
Rates are constantly changing, even in good times
If it seems like insurance rates are constantly changing, you’re right. But why do they change, especially if you don’t have a claim? Insurance is based on a fluctuating claims-based market that changes as risks change. Risks can range from extreme weather damage to liability resulting in nuclear verdicts (exceeding $10 million) to large-scale cyberattacks on critical infrastructure, such as energy or health care.
Insurance underwriters and actuaries calculate risk probability and intensity within a specific time frame. They use risk modeling based on large-scale data to see what risks will cost in a worst-case scenario. They also use detailed data about your business to see how likely you are to have a claim, and price your policy accordingly.
A quick overview of insurance trends and pricing
Insurance works on the idea that you pay a smaller price (your premium) into a larger pool (carrier portfolio of clients who are all paying premiums) to get a payout for the terms that you and your carrier agree on (your insurance contract). Insurance premiums are cheaper than self-insuring. Insurance allows you to reinvest some of your cash reserves in your business, instead of holding them in a savings account to cover a disaster.
Insurance carriers pool the premiums they collect from clients to pay for their clients’ damages. Carriers also invest these premiums to increase their savings, which they use to pay client claims, reinvest in programs or provide discounts to claim-free clients. Insurance carriers must balance their portfolio (premium-paying clients) and revenue investments (bonds, real estate, etc.) to ensure adequate reserves.
A healthy reserves account means an insurance company can meet its payout obligations. Premiums that don’t reflect the actual cost to repair or replace something cause the insurance company to use more money than it budgeted for. If this happens too frequently, the lack of reserves can make the carrier insolvent.
Reserves drive how much risk an insurance company is willing to take
When reserves are low, insurance companies don’t take on too much risk. Instead, they drop riskier clients, increase premiums to reflect market risk, avoid unfamiliar or high-risk markets, and shift their investments to conservative investments, like bonds.
When reserves are high, they retain riskier clients, expand into new markets and maintain more aggressive investment portfolios. They may even share their reserves with their clients through premium refunds.
When insurance companies hold too much risk in one area, like a portfolio of coastal properties prone to hurricanes, it threatens their reserves. In response, they use insurance to counterbalance the risk of massive payouts due to a catastrophe.
Insurance for insurance companies
Reinsurance allows carriers to transfer portions of their risk to other insurers, known as reinsurers. This helps them protect against large losses, like catastrophic weather. When reinsurance prices drop, insurance companies can offload more risk.
By sharing the financial burden, reinsurers help carriers increase their reserves and maintain financial stability. This allows them to continue offering coverage to clients, rather than dropping them and refusing to sell new policies.
Call your broker to compare rates
The 2025 softening trend could represent a window of opportunity for competitive rates. Even though carriers can’t offer insurance sales like you might get with other products, they can evaluate your terms and conditions and deductibles, and broaden your coverage. Negotiate your terms. And capitalize on improvements you’ve made to your business, like installing an impact-resistant roof or a new security system.
Call two months before your renewal to give your broker time to shop for you. They know how to present your business in a favorable light and match you with an insurance company that suits your needs.