可MFcrif

MarketUpdate

Q22025

McG

Content

MarketOverview 3

Property&Casualty 10

EmployeeBenefits 14

MarketUpdatebyIndustry

SectorandCoverages

18

AutoDealers 19

Aviation 21

Construction

26

Cyber

31

Energy

35

Environmental 39

Flood

42

Marine

45

PublicCompanyDirectors

andOfficersLiability

47

PublicEntity

50

RealEstate&Hospitality

55

Restaurants

59

SeniorCare

61

Transportation

64

AboutMcGriff

Whenitcomestoprotectingwhatmattersmostin

businessandeverydaylife,webelieveourclients

shouldneversettleforlessthanthebest.Formore

thanacentury,we’vereliedonexpertise,resources,andrelationshipstodeliverinsuranceandriskmanagementsolutionsfocusedonourclients’prioritiesandwhattheyvaluemost.

McGriffispartofMarshMcLennanAgency(MMA).

Oursolutionsincludecommercialpropertyandcasualty,corporatebondingandsurety,cyber,management

liability,captivesandalternativerisktransferprograms,employeebenefits,smallbusinessinsurance,and

personallines.

Ourexperiencedriskmanagementspecialistsdevelophighlytailoredsolutionswhilelistening,learning,and

executingwithprecisionundertheguidanceofourfourcoreprinciples:

Integrity:Wedowhatwesay,everytime.

Determination:Werelentlesslypursuesuccessonyourbehalf.

Passion:Wearespecialistsinourfielddriventoserveyou.

Collaboration:Webuildstrongrelationshipswithteammates,partners,andyoutocreatethebestsolutions.

Jointhethousandsofbusinesses,organizations,and

individualsacrossthecountrywhochooseMcGriff,afirmdedicatedtobuildinglong-termrelationshipsandhelpingprotectyourmostvaluableassets.

WithMcGriff,you’llneverhavetosettleforless.

|2|

|3|

MarketOverview

WiththeexceptionofCommercialAutoandUmbrella,allotherinsurancelinesshowedlowerpremiumincreasesinQ12025thaninthelastquarterof2024,signalingsoftenedmarketconditions,accordingtothemostrecentreportfromTheCouncilofInsurance

Agents&Brokers(CIAB).

|4|

Premiumsacrossallaccountsizesrosebyanaverageof4.2%,downfromthe5.4%increaseinQ42024.Fivelinesrecordeddecreasesinpremiums:CyberLiability,Directors&OfficersLiability,EmploymentPracticesLiability,

Terrorism,andWorkers’Compensation.

Q499

Q300

Q201

Q102

Q402

Q303

Q204

Q105

Q405

Q306

Q207

Q108

Q408

Q309

Q210

Q111

Q411

Q312

Q213

Q114

Q414

Q315

Q216

Q117

Q417

Q318

Q219

Q120

Q420

Q321

Q222

Q123

Q423

Q324

AveragePremiumChanges,Q41999-Q12025

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

-20.0%

Q401,28.5%

Q320,11.7%

Q124,7.7%

Q113,5.2%

Q410,-5.4%Q216,-3.9%

Q205,-9.7%

Q108,-13.5%

Source:TheCouncilofInsuranceAgents&Brokers

AsinQ42024,CommercialAutoandUmbrellapolicieshadthehighestaverageincreasesinpremiumsofalllinesthisquarter,atanaverageof10.4%and9.5%,respectively,higherthanthelasttwoquarters.Third-partylitigationfunding(TPLF)isoneoftheprincipalfactorsdrivingtheincreasesforbothAutoandUmbrella,accordingtotheCIABreport.

CommercialPropertyInsurance

TheCommercialPropertyinsurancemarketcontinuestoimprovein2025,withpremiumincreasesslowingdownto2.9%,a50%decreasefromQ42024.DespitetheJanuarywildfiresinCalifornia,newunderwriterflexibilityoncommercialpropertyriskshasresultedinbettertermsonrenewal,includinglowerdeductiblesorhigherlimitsandsublimits.

However,whilethemarketissoftening,improvementsareunevenbetweenprogramtypes.Shared/layeredplacementsareseeingsteepratedecreaseswithimprovedcoverageterms,whilesingle-carrierrenewalsarestillexperiencing

increases,especiallyforcomplexrisks.Industriessuchaschemicalandwoodmanufacturingareseeingincreasesof7%to15%,dependingonqualityofrisk/protectionandcompliancewithopenlosscontrolrecs.

Severeconvectivestorms(SCS),withhail,wind,andtornadoes,remainaconcernforinsurers.Sofarin2025,there

havebeen689reportedtornadoesintheU.S.,including81thatwereEF-2orhigher,accordingtotheNationalOceanicandAtmosphericAdministration(NOAA).MostU.S.marketshavemovedtopercentagedeductiblesof1-5%,dependingontheSCSscores.

|5|

2025AnnualPreliminaryReportSummary

Source:NOAA

Inaddition,the2025hurricaneoutlookremainshigherthanaverage.WhilethePropertyinsurancemarkethasimproved,clientsmustcontinuetooptimizetheirprograms.Werecommendthefollowingstrategies.

EvaluateRiskRetentionandSublimitsinYourProgramStructure

Reviewyouroptimalrisk-retentionleveltooptimizeyourprogramstructure.Structuressuchasplusaggregatesoralternativeallotherperils(AOP)deductiblesmaypotentiallybenefityou.

ExploreBifurcatingPrograms

Understandwhatisbehindyourprogram’scost.Aspecificlocation,constructiontype,orriskinyourportfolioofpropertiesmaybedrivingupyourprobablemaximumloss(PML)oraverageannualloss(AAL).Exploreastand-alonesolutionforthischallengingissueandoptimizespecializedmarketsforthatrisk,whichsupersedeaconsolidatedorglobalprogram.

AnalyzeNon-traditionalProgramStructures

Non-traditionalprogramsmayincludealternativerisktransfer(oftencalled“ART”)solutionsthatallowyoutoself-

insureaportionofyourpropertyriskwhilecomplyingwithlendersbyproviding“A”ratedpaper.Youcanalsoconsiderparametriccoverage,atypeofnon-traditionalderivativetriggeredbythedegreetowhichaperilexceedspreset

benchmarksforaspecificeventratherthantheactuallossexperienced.

PlanningforRenewal

Rememberthat“dataiskey,”sowerecommendthat

youproactivelyworkwithyourbrokertoensureyoursubmission/underwritingpackagewillgotothe“topofthestack”byfollowingtheseguidelines:

?EnsureexposuresarecurrentwithfullCOPEdata

duringthecoverageterm,particularlyforanymidtermchanges.

?Providerenewalexposureupdatesearly(120

daysout)alongwithanyrequiredsupplementaryapplications.

?Proactivelyaddressanycritical,openloss-control

recommendationsandprovideallsupporting

documentationnolaterthan90daysbeforerenewal.

?Somecarriersareusingunresolvedloss-controlrecommendationstojustifyhigherrates.

?Tellthestoryof“l(fā)essonslearned”fromlargelossesandhowyouhavemitigatedthepotentialforsimilarfuturelosses.

?Letunderwritersknowaboutyourriskmanagement

strategiestoprotectyourassetsandoutlineanymajorCAPEXforphysicalimprovementsorriskcontrol.

?Meetwithcarriersearlytounderstandanyoftheir

concernsorissuesandthoroughlyexaminepotentialoptions.

?Seektheunderwriter’scommitmenttogeneralrenewaltermsearlyintheprocess.

ProtectingYourAssets

McGriff’sexperiencedPropertyinsurancespecialistscan/will:

?Reviewcriticaloperationstoassistindevelopingorenhancingyourbusinesscontinuityplan.

?Assessandmitigatepropertyriskusingcatastrophemodeling.

?Helpyougetinsurancetovalue(ITV)correct.ITV

scrutinyhascalmeddown,butitisstillcritical.

Potentialtariffsonconstructionmaterialslikesteel,drywall,andlumbercouldincreasematerialcosts,affectingpropertyvaluationadequacy.

?Developalternativesolutionsthatbestcorrespondwithyourcompany’sgoalsandobjectives.

Ourknowledgeableclaimspecialistsareavailabletoconsultonthefollowing:

?Crisisevents

?Catastrophiclossesandwaystominimizetheirimpact

?Litigationandexpensemanagement

?Technicalcoverageanalysis/claimresearchbeforesubmissionofalosstotheinsurancecarrier

?Timeelementanalysistobetterestablishthe

exposuresthatexistforbusinessincomeand/orextraexpenselosses

?Claimauditingservices,includingTPAandcarrierclaims-handlingreviews

?Trainingandeducationtoenhanceinternalandexternalclaimmanagementprograms

|6|

CommercialAutoLiabilityInsurance

CommercialAutoLiabilitypremiumshaveincreasedanaverageof10.4%,thehighestincreaseacrossalllinesof

coverage,andthethirdconsecutivequarterorhigherincreases.AccordingtoAMBest,theoutlookfortheCommercialAutoinsurancemarketremainsnegative.ItsreportinMarch2025attributesthenegativeoutlooktoseveralchallenges,includingtheimpactofsocialinflation,nuclearverdicts,economicuncertainty,experienceddrivershortages,and

distracteddriving.

CommercialUmbrella&ExcessInsurance

CommercialUmbrellapremiumscontinuetorise,witha9.5%averageincreaseinthefirstquarterofthisyear,the5th

consecutivequarterofhigherincreases.Insurersarealsoreducingcapacitybylayerandcharginghigherpricesforlowerlimits.

Q114

Q314

Q115

Q315

Q116

Q316

Q117

Q317

Q118

Q318

Q119

Q319

Q120

Q320

Q121

Q321

Q122

Q322

Q123

Q323

Q124

Q324

Q125

PremiumChangeforUmbrella,2014-Q12025

25.0%

17.3%

15.0%

10.0%

5.0%

0.6%

0.0%

-5.0%

Source:CIAB

|7|

3.3%1.5%

22.9%

16.9%

10.5%

17.4%

-2.8%

20.0%

8.6%

9.5%

|8|

Third-partylitigationfunding,whichallowsoutsideinvestors,suchashedgefundsandforeigngovernmententities,tofinancelawsuitsinexchangeforaportionofanysettlementorverdict,iscontributingtosocialinflationandthefrequencyandsizeofnuclearverdicts(morethan$10M),higherpremiums,andreducedcapacitybycarrier.

AccordingtoarecentreportfromMarathonStrategies,in2024,135lawsuitsagainstacorporatedefendantresultedinanuclearverdict–a52%increaseover2023.Thetotalsumoftheseverdictsreachedaneye-popping$31.3Ba116%increaseover2023.McGriffhascompiledadetailedsummaryofkeyverdictsfrom2020-25youcanfind

here

.

NumberofCorporateNuclearVerdicts:2009-2024

140

120

100

80

60

40

20

0

2009201020112012201320142015201620172018201920202021202220232024

SumofCorporateNuclearVerdicts:2009-2024

$40

$35

$30

Billion

$25

$20

$15

$10

$5

2009201020112012201320142015201620172018201920202021202220232024

Inaddition,accordingtoSwissRe,litigationfundinghasincreasedU.S.liabilityclaimamountsby57%overthepast

decade.Thishasdrivenuppremiumsandcausedinsurerstobecomemorecautious,especiallyincasualtylinessuchasGeneralLiability,Umbrella,andCommercialAuto.Insurersarenowscrutinizingunderwritingmorecarefully,lookingat5totenyearsoflosshistory,andscalingbackcoveragelimitsinhigh-riskareaslikelargecommercialfleets.

RiskManagementPractices

Implementingeffectiveriskmanagementpracticescanhelporganizationsminimizethelikelihoodandimpactofhighverdictsandsettlementsontheiroperations.Herearesomestepsyoucantake:

|9|

EnhanceYourRiskManagementandClaimsStrategy

Alargeshareofthesemassiveverdictsstemsfromsafetyandcorporateresponsibilityissues.Establishingand

documentingrobustriskmanagementprotocolsdemonstratesyourorganization’scommitmenttosafety,ensuringproceduresarerigorouslyapplied,prioritized,andfollowed.

ProactivelyReviewOpenClaims

Regularassessmentsofopenclaimsarevitalinidentifyingoutliersandvolatilerisks.Evaluateemergingtrendsand

evolvingthreatsthatcouldleadtooutsizedjuryawards,andensureyourinsurancelimitsandretentionsaresufficienttoaddresspresentandfuturerisks.Ifpossible,lookatoptionstosettletoclosetheclaimatalowercost.Workwithcounseltodeterminewhichclaimscanbesettledandclosedtominimizethepotentialofahigh-severityjudgment.

MaintainConsistentCommunicationwithInsurers

Scheduleregulardiscussionswithyourinsurerandbrokertoreviewopenclaims,focusingonthosewiththehighestriskpotential.Effectivecommunicationfostersasharedunderstandingoftheclaimsprocessandequipsyouwiththeinsightstonavigatecomplexcases.

LeverageEarlyInterventionTactics

Collaboratewithlegalcounseltoidentifyearlyinterventionstrategiestoresolveclaimsefficiently.Whereappropriate,considerpre-trialsettlementsandengagestakeholderstoappointexperienceddefensecounseltailoredtothespecificindustry,legaldomain,andjurisdictioninvolved.

PrepareThoroughlyforLitigation

Forclaimsthatcannotberesolvedearly,preparediligentlyfordefenseandexplorealternativedisputeresolutionmethods,suchasmediationorarbitration.Theseapproachesoftenresultinlessvolatileoutcomesthanjurytrials,potentiallymitigatingthefinancialimpactofaverdict.

NotifyInsurersEarly

Whenanincidentcouldresultinanuclearverdict,promptlynotifyallinsurerswithrelevantpolicies.Earlynotificationensuresthatinsurersareengagedintheprocessfromtheoutset,providingcriticalsupportandresourcestoaddresstheclaimeffectively.

|10|

Property&Casualty

TheProperty&Casualtymarketstillcontinuesitsoverallimprovementtrajectoryinthe

firstquarterof2025,withreportedaverageincreasesslowingdowninallbuttwolines

ofcoverage,accordingtothemostrecentreportbyTheCouncilofInsuranceAgents&

Brokers(CIAB).Thereportshowsthatpremiumsacrossallaccountsizesrosebyanaverageof4.2%,downfromthe5.4%increaseinQ42024,forthe29thconsecutivequarter.

|11|

Increasesformedium-sizeaccountssawanaverageincreaseinQ1of3.7%,a42%decreasefromQ4’srecorded6.4%increase.Large-accountincreasesweredowntoanaverageof5.3%from6.3%,whilesmallaccountsstayedsteadyatanaverageincreaseof3.6%inQ42024andQ12025.

AverageCommercialPremiumIncreases

ByAccountSize

Small

Medium

Large

Average

FirstQuarter2025

3.6%

3.7%

5.3%

4.2%

FourthQuarter2024

3.6%

6.40%

6.3%

5.4%

ThirdQuarter2024

4.4%

5.6%

5.3%

5.1%

SecondQuarter2024

5.0%

5.1%

5.4%

5.2%

FirstQuarter2024

7.3%

8.5%

7.3%

7.7%

High

20.8%

31.7%

33.0%

28.5%

HighDate

4Q01

4Q01

4Q01

Low

-10.0%

-15.0%

-15.9%

-13.6%

LowDate

Source:CIAB

1Q08

3Q07

3Q07

Workers’Compensationfellthemostthisquarter,byanaverageof2.6%.CyberLiabilityhadanaveragedecreaseof2.1%.Directors&Officers(D&O)Liabilitypremiumsdecreasedby1.7%,andEmploymentPracticesLiabilityandTerrorisminsurancefellbyanaverageof0.4%,accordingtotheCIAB.

Drivenbysocialinflation,thetwooutlierswereCommercialAutoandUmbrellainsurance,withthehighestaveragepremiumincreasesoutofalllinesthisquarter,atanaverageof10.4%and9.5%,respectively.

By-LineFirstQuarter2025PremiumChangesRangedFrom-2.6%to+10.4%

Commercial

Auto

Umbrella

Average

FirstQuarter2025

10.4%

-2.6%

2.9%

4.2%

9.5%

4.9%

FourthQuarter2024

8.9%

-1.8%

6.0%

5.3%

8.7%

5.4%

ThirdQuarter2024

8.5%

-1.4%

7.9%

4.8%

8.6%

5.7%

SecondQuarter2024

9.0%

-2.2%

8.9%

5.1%

7.2%

5.6%

FirstQuarter2024

9.8%

-1.8%

10.1%

4.1%

7.0%

5.8%

High

28.6%

24.9%

45.4%

26.0%

51.9%

35.3%

Low

Source:CIAB

-11.6%

-12.3%

-15.0%

-13.6%

-13.5%

-13.2%

Commercial

Property

Workers’

Comp

General

Liability

|12|

BrokerE&O0.3%15.4%-4.5%

BusinessInterruption

Construction

Cyber

-2.1%

D&OLiability

-1.7%

-0.4%

Flood0.7%8.6%-2.7%

Marine

1.1%

4.5%

-10.6%

MedicalMalpractice

1.8%

32.5%

-4.1%

SuretyBonds

0.3%

11.2%

-2.3%

Terrorism-0.4%10.4%-3.6%

PremiumChangesinOtherLines

1.2%

3.0%

1Q25

28.8%

-10.2%

38.7%

-10.7%

34.3%

-2.1%

32.4%

-8.7%

21.9%

-8.1%

HighLow

EmploymentPractices

Source:CIAB

CommercialProperty

AveragepremiumincreasesforCommercialPropertyinQ12025continuedtodecelerateat2.9%,heavilysubsidizedbythesoftsharedandlayeredmarketplace.

CommercialGeneralLiability

GeneralLiabilitypremiumincreasesaveraged4.2%inQ12025,slightlylowerthanQ42024,accordingtotheCIAB.

However,certainindustryclassescontinuetoseehigherrates,includingRealEstate,Habitational,Hospitality,SeniorCare,andPublicEntities,duetoincreasedlitigation,higherclaimscosts,andlargerverdicts.

CommercialAutomobile

PremiumincreasesforCommercialAutoaveraged10.4%inQ12025.Themarketfacesongoingchallengesand

continuedrateincreases,particularlyfortransportationbusinessesandsmalleraccounts.Factorslikerisingclaimsfrequency,higherlossseverity,andsocialinflationcontributetothesemarketdynamics.

|13|

CommercialUmbrella

AccordingtotheCIABreport,theCommercialUmbrellaandExcessmarketexperiencedanaveragepremiumincreaseof9.5%inQ12025,higherthanthelasttwoquarters.

However,certainclassesofbusiness,likeHabitationalandthosewithadverselossdevelopment,areseeingevenhigherincreases,anywherefrom50%to150%.Insurersalsocontinuetolimitcapacity.Onlythreeyearsago,$25Mlimitswerethenorm.Now,thesesamecarriersarelimitingcapacityto$5Mto$15Mattheexactcostoftheprevioushigherlimits.

Workers’Compensation

Workers’Compensationinsurancecontinuesthetrendofincrementaldecreases,fallingthemostinQ12025,byanaverageof2.65%.Consideringtheincreaseinmedicalcosts,howlongthistrendwillcontinueremainstobeseen.

Directors&Officers(D&O)

FreshcapacityandcompetitionkeptD&Opremiumslowatanaverageof1.7%forQ12025.AccordingtotheCIAB,thiswasthefifthconsecutivequarterofpremiumdecreasesforD&Oinsurance.

PremiumChangeforD&O,2017-Q12025

18.0%

16.0%

14.0%

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

16.8%

14.7%

13.6%

8.9%

7.3%

5.0%

0.2%

1.5%

-0.3%

Q117

Q317

Q118

Q318

Q119

Q319

Q120

Q320

Q121

Q321

Q122

Q322

Q123

Q323

Q124

Q324

Q125

-1.7%

-1.9%

Source:CIAB

CyberLiability

Cyberhadanaveragepremiumdecreaseof2.1%eventhoughclaimspersist.

|14|

EmployeeBenefits

TheEmployeeBenefitslandscapeistransforming,withtechnology,demographicshifts,healthcareinnovation,andeconomicpressureshapingtoday’smarketandtomorrow’ssolutions.

|15|

TheRiseofTechnologyandAIinHealthcare

ThemostpowerfulshiftunderwayinEmployeeBenefitsistheintegrationofartificialintelligence(AI)andwearabletechnologyintobothhealthmanagementandplanadministration.From

smartwatchestocontinuousglucosemonitors,consumersare

usingdigitalhealthtoolstounderstandandmanagetheirhealthinrealtimeandintegratingthemwithhealthcareplatformsandwellnessstrategies.

Forexample,asofMarch2023,

about2.4Mpeopleinthe

UnitedStatesareutilizingcontinuousglucosemonitors(CGMs)

notonlyfordiabetesmanagementbutalsototrackhow

differentfoodsaffecttheirmetabolism.TheinsightfromCGMsisleadingtobehavioralchangesand,insomecases,weightlosswithoutmedication.

Employersandbenefitprovidersarepayingattention.Thesetoolsnotonlyempowerpatientsbutalsoallowproviders

tomonitorhealthconditionsremotely,potentiallyreducinghospitalvisitsandlong-termcomplications.

Atthesametime,AIisrevolutionizingcaredelivery.Consumersuseplatformstoself-triagesymptoms,whilehospital

administratorsleverageAItomodelcostsandoptimizecare

strategies.Physiciansareincreasinglysupportedbymachine

learningtoolsthatassistindiagnosticsandtreatmentplanning,enhancingspeedandaccuracy.

TheRiseofVirtualCareandDigitalPortals

Theriseoftelemedicineanddigitalpatientportalscontinuestotransformhealthcareaccess.Whilethesetechnologies

existedbeforethepandemic,COVID-19actedasacatalysttomodernizecare.Patientscanaccesslabresults,treatmentinstructions,andmedicalrecordsfromtheirphones.This

convenienceisraisingexpectationsforseamless,consumer-gradehealthcareexperiences.

Thisconsumer-centricmodelalsointroducesamore

collaborativeapproachtocare,wherepatientsarebecomingmoreengagedinmanagingtheirhealthwithtoolsthatofferreal-timefeedbackandlearning.

DemographicShiftsandIncreasedUtilization

Beyondtechnology,demographicsareanother

keydriver.TheU.S.populationisagingrapidly,

withmorepeopleenteringretirementand

needingincreasinglymorefrequentand

intensivecare.Evenshiftsliketheaverageageofchildbirthrisingintothe30s(fromthe20s)bringchangesinutilizationandcoverageneeds.

Atthesametime,thereislingeringfalloutfromtheCOVID-19pandemic.Aswediscussedin

ourpreviousupdate,manypeopledelayedcare.Nowthere’saboostinutilization.Yethealthcarecostscontinuetoriseevenasoverallusage

hasn’tfullyreboundedtopre-pandemiclevels,animbalancethatpresentschallengesforbothinsurersandplansponsors.

Obesity,Wellness,andtheGLP-1

Revolution

OneofthemostsignificantdevelopmentsisthesurgeininterestsurroundingGLP-1

medications—drugslikeOzempicandTrulicity,originallyapprovedfortype2diabetesbutnowwidelyusedtosupportweightlossandtreat

chronicinflammation.

AKFFHealthTrackingPollin2024showsthat

publicawarenessofGLP-1drugshasincreasedyearoveryear,withaboutone-third(32%)of

adultssayingtheyhaveheard“alot”aboutthesedrugs,upfrom19%inJuly2023.Moreover,

mostadultswhohavetakenGLP-1drugssay

theytookthemtotreatachroniccondition,

includingdiabetesorheartdisease(62%),whileaboutfourin10saytheytookthemprimarilytoloseweight.

|16|

LargerSharesofOlderAdultsandThoseWithChronicConditionsHaveHeard“ALot”AboutGLP-1Drugs

Howmuchhaveyouheard,ifanything,aboutaclassofdrugsbeingusedforweightloss,suchasozempic,Wegovy,andMounjaro?

一AlotSomeALittleNothingatall

23%

18%

Total

32%

27%

18-29

30-49

50-64

65+

Age

27%

28%

28%

17%

29%

21%

18%

32%

14%

24%

21%

41%

20%

30%

12%

38%

Lessthan$40,000

$40,000-$89,999

$90,000ormore

HouseholdIncome

21%

28%

28%

23%

17%

29%

24%

30%

17%

31%

7%

45%

Havediabetes

Haveheartdisease

Areoverweightorobese

Amongthosewhosayadoctorhastoldthemthey...

10%

22%

23%

45%

23%

21%

15%

41%

12%

17%

29%

42%

Source:KFF

UBSestimates

that40millionpeoplewillbeonGLP-1sby2029,44%ofwhomwillbeintheU.S.

Thesemedicationshavealsoshownresultsbeyondtheirinitialpurpose,includinghelpingpeoplemanagesymptomsofautoimmuneconditions,reduceinflammation,andimproveoverallqualityoflife.Manyemployersareweighing

thecost-benefitequation:whilethesedrugsarecostly,theycanpotentiallyreducefutureclaimsbypreventingcomplicationsrelatedtoobesityanddiabetes,suchasvisionlossoramputations.

Astheirusagegrows,benefitadministratorsgrapplewithwhethertocoverGLP-1sforweightlossandlimitaccesstothosewithspecificmedicaldiagnosesandhowtobalancecostwithpotentialimprovementsinpresenteeismandproductivity.

Thisdebatehighlightsabroaderreality:employersareincreasinglyinvolvedindecisionsthataffectlong-termpopulationhealth,notjustshort-termplancosts.

|17|

TheOpioidAlternativeforPainManagement

TheFDArecentlyapprovedthefirstnon-opioidprescriptionmedicationtotreatmoderatetosevereacutepaininadults.Thiscouldbeagame-changerintheU.S.

Historically,painmanagementreliedheavilyonaddictivedrugs.Thenewalternative,calledJournavx,marksashiftinfocustowardsafer,non-addictiveoptionsthatmaysoonbecoveredinemployer-sponsoredplans.Accordingtothe

FDA,Journavxreducespainbytargetingapain-signalingpathwayinvolvingsodiumchannelsintheperipheralnervoussystembeforepainsignalsreachthebrain.

Non-opioidtreatmentscouldpotentiallyreshapepharmacybenefitsdesignandreducelong-termhealthrisksforplanmembers.

TheCostofHealthcareContinuestoRise

Beneathallthesetrendsliesapersistentandgrowingconcern:cost.Healthcarecontinuestogetmoreexpensiveduetoadvancedtreatments,agingpopulations,inflation,andthegrowinguseofspecialtydrugs.Mercerpredictedthe

totalhealthbenefitcostperemployeefor2025torise5.8%onaverage,evenwithplannedcost-reductionmeasures.Employersexpecthealthbenefitcostperemployeetorise5.8%in2025(aftermakinganychangestocurrentplans).

ChangeinTotalHealthBenefitCostPerEmployeeComparedtoCPI

8%

7%

5.8%

6%

5%

4%

3%

2%

1%

0%

2013201420152016201720182019202020212022202320242025

AnnualchangeintotalhealthbenefitcostperemployeeOverallInflation

Source:Mercer

Whiletechnologyandinnovationofferhope,theyalsocomewithpricetags.Employersmustbalancethedesiretoofferbest-in-classbenefitswithmaintainingfiscalresponsibility.

AMoreCollaborativeFuture

Morethanever,employeesareparticipatingintheircare,usingdigitaltools,AIinterfaces,andreal-timedatatomakeinformeddecisions.Physicians,oncethesoleauthority,arebecomingcollaborators.

ThisculturalchangewilllikelyaccelerateasAI-enhancedinterfacesgiveconsumersaccesstoanswers.Theywon’tbetreatingthemselvesbutwilldemandsmarter,faster,andmorepersonalizedhealthcare.

Foremployers,thechanginglandscaperequiresthoughtfulplandesign,data-drivendecision-making,andawillingnesstoevolve.

MarketUpdatebyIndustrySectorandCoverages

|18|

|19|

AutoDealers

TheAutoDealerinsurancemarketisinatransitionalphaseheadingintomid-2025,withseveralkeyissuesshapingthelandscape.

|20|

PropertyInsurance

Propertyrateshavesoftenedslightlycomparedtolastyear.Whilerateshavecomedown,manycarriersoffsetthedecreas