The latest USI report shows that the global insurance industry will face multiple challenges and opportunities in 2025. Losses from natural disasters continue to rise, and 100 billion US dollars may become the new normal for property insurance. Global disaster insurance losses reached 140 billion US dollars in 2024 (the third-highest in history), and exceeded 50 billion US dollars in the first quarter of 2025, setting the second-highest record for the same period. Despite the well-capitalized reinsurance market and intensified competition leading to a decline in rates, the 5.5% increase in replacement costs and the withdrawal of underwriting in high-risk areas have forced many states to consider government insurance plans.
In terms of casualty insurance, work injury compensation and auto insurance remain stable, but the rise in medical costs and the increase in the frequency of claims may compress profits. The rates of commercial vehicle insurance and liability insurance remain generally stable, but insurance companies are becoming more cautious about high-risk fleets.
The competition in the environmental insurance market is fierce. The demand for pollution liability insurance (CPL/PLL) and comprehensive products has increased, but the over-underwriting capacity has shrunk. The environmental market is expected to grow by 10% annually, driven by brownfield development, PFAS claims and social inflation.
In the executive and professional risk areas, tariff uncertainty, cybercrime and employment liability claims are the main risks. The integration of AI and the intensification of cybersecurity threats have made ransomware incidents a major challenge.
Overall, in the second half of 2025, the insurance industry will balance natural disasters, cost pressures and market competition, while responding to emerging risks.
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