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 two quarters. The Ivans Index is a data-driven report that measures premium rate changes for the most popular business insurance policies.

The July 2025 Ivans Index reiterated the downward trend across many commercial insurance lines. Depending on your industry’s risks, these shifts could signal savings or challenges.

Pricing Across Major Insurance Lines

Ivans spotlighted premium renewal rates in July across several standard commercial lines. The first two quarters of 2025 showed a marked decline in rates, especially in commercial property. As the third quarter rounds out, most lines appear level, with several decreasing. In July:

• Commercial auto rates decreased to an average of 7.96%.
• Business owners policy premiums decreased to 7.55%.
• General liability premiums increased slightly to 4.98%.
• Commercial property premiums showed a fractional decrease from June, to 7.98%.
• Umbrella rates increased slightly, averaging 8.83%.
• Workers’ compensation showed a marginal uptick, to minus 1.48%.

A Closer Look at Cyber Insurance

While traditional commercial lines are showing signs of softening, cyber liability insurance continues to follow its own trajectory. According to Fitch Ratings, stand-alone cyber liability policy premiums declined by 6% in 2024 and have continued to fall into 2025. Weaker pricing and fewer policies contributed to the decline.

The Role of Nonadmitted Carriers in Cyber Insurance

The cyber insurance market has seen increased participation from nonadmitted carriers, which has helped expand coverage options and foster competition. Unlike admitted carriers, nonadmitted insurers are not subject to state rate and form regulations, allowing for greater flexibility in policy design and pricing. However, they are not backed by state guaranty funds. In the event of insolvency, policyholders may not have recourse for unpaid claims.

Evolving Cyber Trends Affect Pricing

Cyber insurance claims are still evolving, and it’s difficult to price policy trends accurately. Technological advancements, such as 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.

Why Insurance Rates Change — Even Without a Claim

If it seems like insurance rates are constantly changing, you’re right. But why do they change, especially if you haven’t filed a claim? Insurance is based on a fluctuating, claims-based market that shifts as risks change. Risks can include extreme weather damage, liability resulting in nuclear verdicts — $10 million or more — or large-scale cyberattacks on 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 estimate worst-case scenario costs. They also use detailed data about your business to assess the likelihood of a claim and price your policy accordingly.

How Insurance Companies Manage Risk

Insurance works on the principle that you pay a smaller price — your premium — into a larger pool of clients who are all paying premiums. In return, you get a payout for the terms agreed upon in your insurance contract. Insurance premiums are typically cheaper than self-insuring, allowing you to reinvest cash reserves into your business rather than holding them in savings for a potential disaster.

Carriers pool premiums to pay for client damages and invest those premiums to grow reserves. These reserves are used to pay claims, reinvest in programs or offer discounts to claim-free clients. Insurance carriers must balance their client portfolio and investment revenue to maintain adequate reserves.

Healthy reserves mean an insurance company can meet its payout obligations. Premiums that don’t reflect actual repair or replacement costs can deplete reserves. If this happens too often, the carrier may become insolvent.

Reserves Drive Risk Appetite

When reserves are low, insurance companies reduce risk exposure. They may drop riskier clients, raise premiums, avoid unfamiliar or high-risk markets, and shift investments to conservative options like bonds.

When reserves are high, they retain riskier clients, expand into new markets and maintain more aggressive investment portfolios. They may even share reserves with clients through premium refunds.

If a company holds too much risk in one area — such as coastal properties prone to hurricanes — it threatens reserves. To counterbalance this, carriers use insurance for themselves.

Insurance for Insurance Companies: Reinsurance

Reinsurance allows carriers to transfer portions of their risk to other insurers, called reinsurers, helping protect against large-scale losses. This is especially important in regions prone to severe weather events.

In North Dakota, for example, a major hailstorm could cause widespread property damage and significant claims. Reinsurance helps carriers absorb those losses without jeopardizing financial stability. When reinsurance pricing softens, insurers can transfer more risk, which may lead to more flexibility in underwriting and pricing for policyholders.

Renewal Planning in a Shifting Market

The softening trend in the 2025 insurance market may offer opportunities to refine coverage and secure more favorable terms. While carriers don’t offer promotional pricing, they do respond to strong risk profiles and thoughtful risk management.

Your Bravera Insurance advisor will work with you to ensure your policy reflects the full strength of your business. With time to assess your current coverage and any operational changes, your advisor can position your business strategically with carriers and advocate for terms that align with your goals.