Personal and commercial lines insurance rates continued to increase in the first quarter of 2025, according to the latest report from MarketScout, which was published a week after two reports revealed the property & casualty insurance market has returned to underwriting profitability.

Personal insurance rates in the U.S. continued their upward trend in the first quarter of 2025, with the composite rate increasing to 4.9%, up from 4% in the first quarter of 2024, according to the latest market data.

In 2024, U.S.-domiciled p&c insurers collected $1 trillion in annual direct premiums written for the first time ever, according to a report by S&P Global Market Intelligence.

Homeowners insurance led the surge, particularly high-value properties, acording to MarketScout. Policies for homes valued over $1 million rose by 7.3%, while those under $1 million increased by 4%. Personal articles rates also jumped significantly, increasing from 2.3% to 4.3% over the quarter.

Homeowners increases were “likely due to the lingering impact of recent California wildfires," said Richard Kerr, CEO of Novatae Risk Group. “Rates are now trending upward and could rise further as we head into hurricane season."

Commercial insurance rates also continued their upward trend in the first quarter of 2025, with the composite rate increasing to 3%.

“Umbrella and excess liability, along with automobile coverages, saw the most significant rate hikes this quarter—both increasing by 6.7%," Kerr said.

In March, Verisk and the American Property Casualty Insurance Association (APCIA) reported that U.S. p&c insurers recorded an underwriting gain of $24.8 billion in 2024, showing significant improvement compared to the underwriting loss of $21.8 billion recorded in 2023.

This was the first full-year underwriting gain reported in four years, the report said, noting that the improvements can be attributed to premium increases to better match levels of risk.

Will Jones is IA editor-in-chief.