Commercial insurance trends shift over time, with some risks and opportunities taking priority over others. As we move into the fourth quarter of 2025, reassessing trends and priorities can help agents manage an unpredictable market. Shifting carrier appetites and consumer demands, along with regulatory shifts and advancing technology, combine to create a dynamic ecosystem.
Gallagher recently published its update, “Navigating Now: 4 Commercial Insurance Trends for Q3 2025,” outlining four significant commercial insurance trends to know about. Read on to learn about the trends and what they mean for agents.
Four Key Commercial Insurance Trends and How to Manage Them
The four key trends Gallagher identified are as follows:
Continued challenges in the casualty market. The report cites significant challenges in the casualty market driven by rising claims costs, prolonged litigation, and nuclear verdicts. Third-party litigation funding, which can incentivize larger settlements and make it more complex to settle claims, is on the rise in many jurisdictions, as well.
For agents, one way to respond is by being proactive before renewal season. Commercial clients with casualty programs may need to explore alternative risk transfer options, modify their program structure to control costs, or plan to use the E&S market.
The property market remains stable for now. Even acknowledging the California wildfires and significant flooding, the property market remains relatively stable for now. Competition is growing, carriers want to expand, and they want to offer rate reductions. This means agents should see faster quotes and better terms, giving flexibility to many policyholders.
There is, however, a potential growing gap in cyber-physical coverage, the report noted. Agents should consider the risks of cyber events causing physical damage and whether policyholders are adequately covered. The report noted that 91% of business owners surveyed were concerned about natural disasters impacting operations. Flood and fireproofing are becoming even more critical as high-priority risk mitigation techniques.
AI contributes to cyber risk through deepfakes. Cyber continues to be a rapidly-evolving and consequential risk for businesses. The rise of AI-enabled technology has created new risks, including that of deepfakes, which are AI-generated images, videos, and audio that convincingly mimic a real person. Deepfakes are being exploited in social engineering schemes to trick employees into transferring funds or bypassing security workflows.
Agents can proactively educate policyholders about both the advancements in technology and the way insurance policies are responding to issues like deepfakes, which are not always covered under existing cyber policies. AI is accelerating the scale and sophistication of cyber attacks, and policyholders should have an awareness of these risks.
The market is defined by increased uncertainty. The report described a striking contrast in the market now, defined by global macroeconomic uncertainty on the one hand and a largely favorable market for insurance buyers on the other. The uncertainties of the macroeconomic concerns can lead to hesitation and a decreased confidence in the market. But competitive pricing and advantageous terms in some lines, along with increased carrier appetites and capacity, means positive outcomes for policyholders in pricing and terms.
Agents can help policyholders reassess their risk profiles and shift risk management techniques to follow market opportunities. It may be time to leverage relationships with carrier partners for better terms. Finally, help policyholders fill coverage gaps as capacity expands and pricing is favorable. While clients may be tempted to shop based on price, agents can advise them on risk management strategies, alternative risk transfer ideas, and long-term plans.
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External Links:
- https://www.ajg.com/news-and-insights/4-commercial-insurance-trends-for-q3-2025/
- https://instituteforlegalreform.com/research/nuclear-verdicts-an-update-on-trends-causes-and-solutions/
https://www.irmi.com/term/insurance-definitions/alternative-risk-transfer
