In 2024, a dramatic increase in social inflation, extreme weather events and rising insurance costs presented significant challenges to the personal lines property & casualty insurance market, with the high-net worth customer segment no exception. And while there are signs of stabilization in certain regions, some challenges will follow us into 2025.

For agents and brokers serving high-net worth clients, this year will be about more than just managing policies. The evolving market demands adaptability and a forward-looking perspective to help clients feel secure in an uncertain world.

Here are five trends to watch:

1) Shifting homeowners rates. Property insurance rates for affluent clients are expected to continue climbing in 2025, according to the Risk Strategies “State of Insurance Market Report." The increases will be driven by location-specific factors and broader influences, such as rising property values, labor costs and unpredictable natural disasters. Rate increases will vary significantly across carriers and regions, with projected hikes ranging from 10% to 50%.

While pricing for all homeowners insurance fell slightly at the end of 2024, the composite rate was up at least 5% for auto insurance and homes valued around $1 million, according to the MarketScout Market Barometer.

2) Increased reliance on non-admitted coverage. Admitted carriers will likely maintain a cautious approach in catastrophe-prone regions, pushing many high-net worth clients to seek coverage through surplus line carriers. Rates in the surplus market remain significantly higher than those offered by admitted carriers. However, early signs of stabilization in the reinsurance market could signal increased surplus capacity by the end of 2025, offering a glimmer of hope for rate relief.

3) Changes in the flood insurance market. The flood insurance market is undergoing changes driven by the National Flood Insurance Program (NFIP) and growing opportunities in the private market. Climate-related flood risks are increasing awareness, though many homeowners still lack a sense of urgency to secure flood coverage.

Outside of Florida, capacity remains sufficient, with private insurers eager to cover coastal and non-coastal risks, according to Amwins' “State of the Market—2025 Outlook for Small Business and Personal Lines." As demand rises and private insurers enter the market, rates will stabilize in many states. With stabilization comes opportunities for brokers to educate clients on the importance of flood insurance. 

4) Heightened roof scrutiny. Roofs are becoming a growing concern for insurers, with more attention being paid to factors like age, materials and steps taken to protect them—especially in areas hit hardest by severe weather. Some carriers may require roofs to be less than 10-15 years old, leaving homeowners struggling to understand why their 12-year-old roof that is still in good condition has become a sticking point for coverage.

5) Challenging legal environment. Social inflation continues to drive up claims costs, particularly in high-profile cases, which will continue to increase premiums and limit access to higher coverage limits. The growing influence of social media and online activity increases the risk of financial and reputational damage, as one misstep can quickly spiral out of control. As capacity tightens, rate increases of 10% or more are anticipated in the affluent excess liability market, mirroring trends in the affluent homeowners market, according to the Risk Strategies “State of Insurance Market Report."

Agents are in a key position to help high-net worth clients navigate rising premiums, shifting insurance markets and emerging risks by offering proactive guidance on coverage options, policy updates and changing trends. A yearly review of clients' coverage is essential to ensure policies align with any lifestyle changes and continue to provide comprehensive protection.

A yearly review is also a great opportunity to discuss and implement new risk mitigation strategies. Agents can help their affluent clients understand that proactive measures can make a significant difference in remaining insurable.

For example, clients should consider installing leak detection systems, whole-house generators and home inventory systems. Options such as hurricane clips, flood vents and ember-resistant vents should be considered for location-specific risks. And liability risks can be addressed by encouraging defensive driving courses for teens or taking other preventive measures.

While challenges still exist, there's plenty of reason to be hopeful about the future of the insurance market. By staying proactive, anticipating emerging risks and showcasing your value as an independent agent, you can help your high-net worth clients be ready for what comes next.

 Diane Delaney is CEO & executive director of Private Risk Management Association (PRMA).