Personal Insurance Trends & Partnership Strategies for 2025

Personal Insurance Marketplace Strategic partnerships create value for customers and employees by addressing the financial challenges of rising personal insurance costs.

What to Expect in 2025 Rising personal home and auto insurance rates – driven by increased claims expenses, soaring property values and more frequent natural disasters – will continue to reshape the North American personal insurance market in 2025. With growing financial pressures on consumers and employees, obtaining tailored guidance from a neutral insurance broker can help. Forward-thinking companies can address this challenge by partnering with a digital insurance broker to embed comprehensive solutions directly into their customer and employee platforms. These partnerships provide stakeholders with unbiased advice and choice, streamlining the personal insurance buying process while cultivating resilience, enhancing profitability and driving sustainable growth for the organization. 45% Percentage of companies that plan to implement strategic partnerships as part of their growth strategy in the next 24 months. Source: HUB’s Outlook Executive Survey polled 900 C-Suite and VP-level executives on the issues facing them on profitability, employee vitality and organizational resilience. 2

Profitability Sustainability Address personal insurance needs and unlock new revenue streams with strategic partners. Higher claims costs, inflation and natural catastrophes increasingly difÏcult as carriers exit markets and raise rates have tightened profit margins for businesses and have in others, putting home sales in jeopardy. The number driven up personal insurance rates for consumers, forcing of potential buyers backing out of the lending process 3 companies to rethink their strategies as they deal with before they close is at an all-time high, primarily due to economic challenges and shifting consumer behavior. affordability issues. Forming a strategic partnership that addresses challenges in the personal insurance marketplace can benefit both a To minimize impact to the bottom line, companies should company and its clients. Providing a simple, intuitive way pursue strategic partnerships that fill their customers’ to shop for and buy personal insurance opens new revenue need for more personal insurance support while helping to streams for the business and adds value for clients. build a diversified revenue stream. Consumers are feeling squeezed by rising insurance premiums. In 2025, auto premiums are expected to rise as 1. VIU by HUB, “2025 Personal Insurance Marketplace Rate Guide,” much as 5% while homeowners premiums may grow by December 3, 2024. 1 — especially in high-risk areas vulnerable 2. Deloitte, “State of the US Consumer: September 2024,” September more than 15% 30, 2024. to extreme weather events. As total housing expenses 3. Redfin, “Redfin Reports Existing Home Sales Rose 0.6% Last increase, consumers may be forced to search for cost- Month, But Were At the Lowest July Level on Record,” August 19, 2024. 2 saving opportunities in other categories. Rising insurance premiums have additional implications for the real estate industry. Securing home insurance, particularly in disaster-prone areas, is becoming Case Study A mortgage servicing company partnered with VIU by HUB to integrate personal lines insurance into their customer offering, particularly for clients in disaster-prone areas like Florida. This streamlined process allowed clients to secure home insurance through VIU alongside their mortgage products, improving customer satisfaction and reinforcing the mortgage servicing company’s role as a reliable, all-in-one financial partner. As a result of the strategic partnership, the mortgage servicer earned a percentage of the revenue — creating a new revenue stream and increasing profitability. 33

Vitality Enhance employee financial wellness with personal insurance options. Despite inflation easing, financial stress remains a significant workplace issue. Only 47% of U.S. workers report feeling financially well,4 leading to productivity losses and retention risks. More than half of financially stressed employees spend three or more hours per week 5 These dealing with personal finances while at work. employees are also more likely to leave for new jobs. To counter this, employers can offer voluntary benefits that help support the financial wellbeing of their employees. According to the HUB International 2025 Outlook Executive Survey, 96% of the respondents state their Nonprofits may prioritize personal insurance benefits employees’ financial wellness has been impacted more than other industries, with 38% offering options “moderately” or “severely” by rising personal insurance to employees, according to the HUB survey. Securing premiums. While the HUB survey data show that U.S. and maintaining a dedicated workforce in this sector companies want to improve employee financial wellness is challenged by tight budgets and grueling service by offering personal insurance solutions as a voluntary demands. Still, nearly two-thirds may miss an opportunity benefit, most do not – putting workplace vitality at risk. to limit turnover and maintain organizational effectiveness by not offering these additional benefits. In real estate, for example, comprehensive financial support could help retain agents and better ensure long- term success for brokerages. HUB’s survey data indicates 4. SHRM, “Employee Financial Wellness Inches Up After All-Time that only 10% of real estate companies offer personal Low,” May 29, 2024. insurance solutions, while up to 88% of new agents quit 5. PwC, “PWC’s 2023 Employee Financial Wellness Survey,” January 2023. 6 before reaching their five-year tenure. 6. HR Management, “Overcoming High Turnover Rates: Lessons From The Real Estate Industry,” June 13, 2024. Retaining talent becomes increasingly vital in industries 7. U.S. Bureau of Labor Statistics, “Charging into the future: the requiring a specialized workforce. In the competitive transition to electric vehicles,” February 2023. industry of electric vehicle manufacturing, companies could offer personal insurance benefits to differentiate themselves and attract top candidates. It is estimated that there will be a 17% increase in employment in the sector between 2021 to 2031, so businesses must prioritize 7 benefits to retain skilled workers amid growing demand. 4

Resiliency Embrace innovation to stay competitive – and create customer convenience. Resiliency is paramount for business success, especially For organizations delivering mission-driven services, while striving to improve the customer experience in the resiliency hinges on successful initiatives within wake of rising operational costs, ongoing climate risks communities, great relationships with donors and strong and slowing economic growth. Embracing an innovative membership bases. AfÏnity groups can embed a white- approach, such as building a digital ecosystem of labeled digital platform offering personal insurance solutions, is key to remaining competitive in 2025 and options to help elevate the organization with its members beyond. and increase long-term value. With home prices expected to rise as much as 4.4%, 8 affordability will continue to shape buyer behavior. Real 8. Norada, “Real Estate Market Predictions 2025: What to Expect,” estate companies can embed an innovative personal September 14, 2024. insurance solution into the home-buying process to help 9. Expertise.com, “Study: 62% of Americans May Be Missing Out on their clients secure adequate and affordable insurance Car Insurance Savings,” July 15, 2024. that fits their needs. By connecting clients with unbiased advice and expertise, a mortgage lender can build trust with a home buyer – and prevent costly home purchase cancellations. Strategic partnerships with insurance brokerages also create convenience for customers, which keeps them 9 referring and returning. For example, 42% of consumers shop for car insurance mostly through online comparison sites, so automotive lenders could offer car buyers access to insurance advice and choices while a deal is closing. Case Study Altair Global, one of the largest independent global relocation management companies, sought to enhance the relocation experience for its clients. They chose VIU by HUB to deliver an omnichannel platform that offers personal insurance to meet the diverse needs of five generations in the workforce. Thirty-seven percent of referred Altair Global customers chose to speak with a VIU by HUB advisor to receive tailored coverage options as they navigated life in a new location, and 86% of shared customers renewed their policy through VIU by HUB, showcasing the ongoing value of the partnership. 5

Trend Watch Organizations with benefit options will weather the storm and shore up resiliency. From hurricanes to wildfires, extreme weather events continue to impact operations, financial stability and long- term planning across all industries. In 2025, the frequency and intensity of these events are expected to increase, further testing the resilience of multiple industries. There were $62 billion of insured losses in the first half of 10 2024, roughly 70% above the 10-year average. Two-thirds of consumers say extreme weather has impacted their insurance premiums, with 1 in 10 reporting “not confident” 11 With 8.5% of they can afford to renew their policy. mortgage holders going without homeowners insurance Organizations have an opportunity to foster employee 12 relationships by helping them prepare and protect their altogether due to high premiums, lenders and real estate professionals must evaluate how their operations will deal financial health through personal insurance benefit with losses from property damage, the inability to rebuild options. and changes in community dynamics. Adding to the overall risk, along with skyrocketing 10. Insurance Journal, “Extreme Weather Sends Insured Losses 70% insurance premiums due to severe weather, are house Above Historical Norms,” July 31, 2024. hunters who may reconsider construction quality and 11. Fannie Mae, “Consumers Worried about Impact of Extreme Weather on Homes and Insurance Premiums,” April 3, 2024. location before signing on the dotted line. The real 12. NBC News, “1 in 8 U.S. homeowners aren’t protected by estate industry can help itself by presenting would-be homeowners insurance,” September 17, 2024. homeowners and mortgage holders with a range of carrier options and the expert guidance of a broker. Extreme weather also affects employee behavior, and businesses should provide workforce support in these disaster-prone areas. Organizations that serve populations after devastating weather events must prepare to face a growing demand for services. The frequency and severity of such events will drain resources and employee morale. 6

Navigating Your Next Steps Navigating Your Next Steps HUB construction insurance, risk management and employee benefits As businesses navigate the shifting landscape of insurance and customer specialists will work with you to develop a tailored strategy that will protect expectations, taking proactive steps today will strengthen operations for the bottom line, support your workforce and build resiliency for 2025. Here 2025. Some key strategies for your company’s long-term success include: are some initial considerations: Forge a strategic partnership with a trusted insurance Partner with Making risk management a pillar of your organization’s culture technology provider. Embedding a digital insurance brokerage a reliable can help identify exposures and develop response plans in case 1 Develop a solution directly into your business model provides your clients insurance tech of any type of incident, whether that is a weather-related event, 1 comprehensive with unbiased advice and choice that leads to increased company. a threat of physical safety or a cyberattack. Make sure your risk plan. retention and improved profitability. broker understands how to approach risk and can identify gaps in insurance that could disrupt your daily operations. A broker provides your clients with access to multiple carriers, offering a variety of coverage options tailored to their specific needs. Provide choices With ongoing proactive guidance, brokers ensure that your clients’ 2 and unbiased To compete for a shrinking pool of skilled labor, personalized benefits protection evolves as their needs change, delivering personalized advice. Create a based on HUB Workforce Persona Analysis and data analytics can solutions and peace of mind. personalized help your company differentiate itself from the competition. Creating 2 benefits a quality employee experience (QEX) will boost engagement, improve strategy. recruitment and retention and promote worker wellbeing Embrace embedded technology to deliver a frictionless Leverage customer experience. VIU by HUB’s comprehensive digital solutions omnichannel platform offers side-by-side comparisons of policy 3 to enhance client options and allows your clients to shop the way they prefer experience. – online or by phone – leading to a more enjoyable customer experience and a higher regard for your brand. Remain Safety is already the focal point of your operation, but with 3 focused on an influx of new and less-experienced workers, injury risks workplace increase. Work with a risk professional to review your safety To succeed, you must meet your customers and employees safety. program at least annually and address any issues. where they are. Today’s consumers prioritize “matters of the Adapt to heart” over transactional details, and they want easy access and 4 evolving simple insurance solutions that align with their budgets, lifestyles consumer and values. Showing clients that you’re invested in their financial priorities. wellness fosters loyalty and encourages referrals. Stay in contact with your broker and let them know about changes to the business to eliminate surprises at renewal. Be transparent Review exposures and insurance needs at least 90 days prior with your The growing impact of climate change on the insurance marketplace 4 broker. to policy renewal to allow your broker to find the optimal requires a partner with a clear understanding of the underlying coverages for your organization. factors driving these shifts. A broker has an unbiased perspective on Thoughtfully lean 5 into risk. the industry and can provide your customers and employees with ongoing advice and support to help mitigate potential coverage disruptions and keep you competitive. 7 7

Personal Insurance Marketplace Rate Guide — U.S. VIU by HUB's rate guidance is based on proprietary research and interviews with our experts specializing in personal lines business. On average, we are experiencing rate increases for nearly all coverages as carriers need additional premium to support increased losses and expenses. Given the increased frequency and severity of weather events, rate increases are expected for homeowners in catastrophe-prone areas, while other policy segments will see a slowdown in rate increases. Below are projections of rate increases that we anticipate in 2025. It’s important to discuss your unique exposure with your insurance broker and understand what to expect well in advance of your next renewal. 2025 Personal Coverage Insurance Rate Insights Guide With inflationary pressures expected to moderate and rate levels gradually stabilizing, auto rate increases are projected to hover around 5%. Rate increases will persist to counterbalance rising costs for labor, Auto +5% medical and replacement vehicles. This is good news as the overall effective auto rate increase was +14% in 2023, followed by another +14% in 2024, driven by a combination of inflation, severity trends and regional catastrophe losses, including Hurricane Ian. Homeowners loss ratios have steadily increased, inching upwards from 75% in 2021 to 85% in 2023. Significant hurricane-related events in 2024 will keep overall homeowners loss ratios elevated – despite the amount of uncovered flood losses and the absence of major wildfires. Capacity will continue to tighten in some regions, including the Homeowners +15% Midwest, prompting carriers to leave the market entirely than increase rates. Similar to auto, materials and labor costs remain key drivers of severity. In high-risk catastrophic-prone regions, rate increases exceeding 15% are projected to persist in 2025, while areas with lower weather-related risks may see a slowdown or stabilization in rate increases (i.e., Coverage A values have automatically adjusted for many policies). Social inflation remains a primary underwriting concern for umbrella Personal Umbrella +10% policies, especially in jurisdictions with a history of high-dollar verdicts. Rising legal and medical costs will continue to impact coverage but are expected to stabilize in 2025. Wind coverage insurance rates, which protect against damage from strong winds like hurricanes or storms, are expected to increase in catastrophic-prone areas, especially near the Gulf of Mexico and Atlantic Ocean. The biggest rate disruption will likely come from flood Catastrophic Perils +20% insurance, with changes extending beyond 2025 as FEMA updates its flood zones to include more high-risk areas. Homeowners without flood insurance will need guidance on how to plan and budget for this additional coverage. For example, only 1% of North Carolina homeowners who were impacted by Hurricane Helene had flood insurance. 8

Personal Insurance Marketplace Rate Guide — U.S. 2025 Personal Coverage Insurance Rate Insights Guide Specialty: Much like the automobile market, specialty coverage lines will see an increase to offset losses driven by labor costs, parts and vehicle Motorcycle, RVs, +5% to +10% replacement expenses. Though parts and labor still affect severity, they Watercraft are not expected to drive significant rate increases like the auto market in which complex technology plays a larger and more costly role. NOTE: Rate is typically defined as the amount of money necessary to cover losses and expenses while providing an insurance company with a profit for a unit of exposure. Exposure refers to a business’ or individual’s susceptibility to various daily risks. Carriers evaluate the level of risk an insured faces in calculating insurance premiums. 9

Personal Insurance Marketplace Partnering with VIU by HUB helps you build stronger relationships and boost loyalty by offering personalized insurance solutions for your customers and employees. Contact us to learn how we can seamlessly integrate into your existing experience and provide a distinct competitive edge for your business. Powered by the #1 personal lines broker in North America Compare, shop and customize quotes from 50+ top-rated carriers Unbiased advice from 80+ licensed advisors across all 50 states Stay up to date Subscribe to receive risk and insurance insights and event invitations throughout 2025. Subscribe viubyhub.com