The property and casualty insurance market is softening.

Joe Paduda

But that just means price increases aren’t as high as they’ve been of late.

This is a major change from recent days, where prices for all insurance lines, except work comp, kept increasing. 

Work comp rates continued to drop, down 1.75% in Q2 2025 after dropping 1.5% in Q1.

From Ivans

While all that sounds like good news for policyholders, rates still increased for most lines:

• Commercial property was up 8.2%.
• GL climbed 4.8%.
• Commercial auto jumped 8.4%.

Note that these changes are in the past. California’s work comp rate increase won’t be factored in for months. As the Golden State accounts for 21% of total U.S. work comp benefits, it will have a proportionate effect on national numbers.

So what’s going on?

Specific to work comp: 

• Medical inflation is pretty much flat (except in California).
• Claim frequency continues to drop.
• Profits for insurers remain incredibly/outrageously/insanely/unconscionably high. 
• Work comp looks like a great business, so there’s more and more competition to write insurance, which puts downward pressure on premiums.

What does this mean for you?

The work comp profit run has gone on for a very long time, and there’s no indication it is ending.

Joseph Paduda is the principal of Health Strategy Associates, a consulting firm focused on improving medical management programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.