At Schauer Group, we want to help our clients understand the factors influencing pricing. If you have questions or would like to discuss these issues further, please reach out to your advisor.
Commercial insurance pricing continues to rise, but the increases appear to have stabilized.
At the end of 2024, the average increase in pricing across all account sizes was 5.4 percent – similar to the increases seen in the previous two quarters, according to a report on Q4 2024 premiums from The Council of Insurance Agents and Brokers. That said, there are a few outliers in pricing, with some areas of coverage experiencing outsized increases and others experiencing notable decreases.
Where prices are rising
Commercial auto premiums have risen every quarter for the past 13 years. In Q4 2024, they jumped nearly 9 percent – the result of both the increased number of claims and the increased cost of claims.
The 2025 Commercial Auto Insurance Market Outlook from CBIZ cites several reasons both claims and prices are rising:
- Driver shortages mean some companies have lowered their hiring standards, which has led to more accidents.
- Since 2012, “nuclear” verdicts (those topping $10 million), have increased the cost of commercial insurance claims by at least $30 billion, and the number of nuclear verdicts awarded annually has risen 50 percent.
- More fleets are using electric vehicles. Not only are they more expensive to purchase and subsequently insure, but they also present unique risks, such as increased fire hazards and cyber threats.
- Supply chain issues persist, and the more sophisticated safety features in vehicles make repairs more expensive.
Where prices are decreasing
Cyber saw a record-low pricing decrease in Q4 2024, with premiums dropping nearly 2 percent. While the number of cyber claims continues to rise, the severity of those claims is dropping, according to a 2024 cyber market update from Swiss Re, and the market is becoming more competitive.
Other areas where the cost of coverage is decreasing are workers’ compensation (-1.8 percent), directors and officers (-1.5 percent), and employment practices (-0.2 percent).
For additional pricing trends, read the full report from CIAB.
While the team at Schauer Group can’t control the factors that dictate insurance pricing, they are committed to helping your company find the right long-term insurance partners and secure competitive pricing. Please reach out to your advisor if you’d like to discuss further.
