Insurance Outlook: What Michigan Businesses Need to Know

As we move toward the end of 2025, the insurance market remains an important focus for business owners and operators. Current trends indicate that while some sectors are experiencing stabilization, others are facing rising premiums and more stringent underwriting standards. 

For example, property insurance rates have increased by 10%-15% on average, while cyber insurance premiums have surged by as much as 30%. The commercial auto insurance market has seen a moderate increase of around 5%-10%. These trends highlight the necessity for businesses to stay informed and proactive in their insurance strategies.

Spotlight on common insurance coverages 

Here are five common insurance coverages and the current trends affecting their rates:

• Cyber insurance has become significantly more expensive due to an increase in claims and stricter underwriting guidelines. However, the market is showing signs of stabilization, with rates potentially decreasing by up to 10% by the end of 2024. This trend will benefit companies with strong risk management practices and favorable claims histories. 
• The property insurance market is improving, with reinsurance renewals in January and April leading to flat or low single-digit rate increases. Increased capital and competition have given insurers higher profits, leading to more capacity and options for businesses. Some programs are even seeing rate reductions, particularly those with strong risk management and optimal structures. However, underwriters still evaluate each insured individually, focusing on factors like loss experience and geographic risk, so businesses with weaker profiles may face higher costs.
• General liability insurance is experiencing similar trends to property insurance. Companies with strong claims histories and robust risk mitigation practices can expect increases up to 10% or flat renewals. Those lacking these practices will face increased premiums. 
• Auto insurance rates are continuing to rise significantly, from 5%-15%. Factors such as distracted driving and large verdicts in liability cases are driving these increases. Businesses should prepare for ongoing rate hikes and consider enhancing their risk management strategies, although the potential for rate hikes is lower for coverage of five vehicles or fewer. 
• Workers’ compensation insurance remains relatively steady, with the potential for rates to be down or up by 3%. However, businesses must remain vigilant, as work-related auto accident claims can impact workers’ compensation policies and the market is highly competitive.
   

6 best practices for navigating the insurance market 

To effectively manage the evolving insurance landscape, consider implementing the following six best practices:

1. Review your risk management plan. Conduct a comprehensive review of your enterprise-wide risk management plan to identify potential losses and minimize claims. Assess both legacy and emerging risks relevant to your industry and location to ensure your strategies are up to date and effective.
2. Educate yourself about the marketplace. Analyze your exposures and understand the available carriers. If you’re unaware of limited carrier options and rely on competing brokers, you could be at risk.
3. Explore nontraditional insurance sources. Consider alternative insurance options such as excess and surplus insurers, captive insurance arrangements and assuming additional risk. 
4. Implement emergency response plans for catastrophes. Underwriters favor businesses that have established plans for evacuation, property protection and business continuation in the event of severe weather or other disasters. These measures can help secure appropriate coverage at more affordable rates.
5. Build resiliency against disasters. Upgrading vulnerable elements like roofs, plumbing and electrical systems can better protect your business’s properties against weather-related events and other disasters. While it’s impossible to eliminate all disaster exposure, taking these steps can reduce the risk of claims.
6. Partner with a trustworthy broker. Choose a broker who takes a consultative approach. Having access to regional carriers whose rates may not be as heavily impacted by natural disasters such as hurricanes, earthquakes or wildfires may also provide some relief. A broker who understands your business and can represent you effectively in the insurance marketplace is invaluable. Also, engage with your broker early on, ideally starting the renewal planning process up to 150 days before the deadline.
   
   

Stay ahead of the curve

Remaining informed about market trends and implementing strong risk management practices are essential for managing insurance costs effectively. By partnering with knowledgeable brokers and understanding coverage options, businesses can stay ahead of the curve.

About the author

Kyle Bloemers is the Chief Sales Officer for global insurance brokerage Hub International Michigan out of Grand Rapids.