Daily California P&C Insurance News

Key developments impacting Property & Casualty insurance in California

Catastrophe Bonds

Issuance of Rule 144A property catastrophe bonds in 2025 has surpassed $20 billion, driven by the settlement of California’s FAIR Plan’s record $750 million Golden Bear Re Ltd. wildfire cat bond. This milestone underscores strong capital markets appetite for wildfire risk and supports reinsurance needs for insurers of last resort.[1]

Regulatory Changes

California Insurance Commissioner Ricardo Lara proposes stricter funding rules for consumer groups challenging insurer rate hikes, aiming to curb delays amid wildfires driving carriers to reduce policies. Industry groups support the reforms as needed fixes to a broken process, while Consumer Watchdog calls it revenge that will speed unjustified rate increases.[2]

Homeowners Insurance

California home insurance premiums are forecasted to increase roughly 20% or more between 2023 and the end of 2025 amid ongoing market pressures. These hikes reflect broader challenges in the state’s property insurance landscape driven by catastrophe exposure and capacity constraints.[6]

Reinsurance Market

Ample property/catastrophe reinsurance capacity is creating a buyers’ market with softening rates expected for 2026 renewals, down 5-10% despite California wildfires adding $40 billion to incurred losses in recent years. Primary insurers, including those in California, will benefit from these favorable reinsurance terms alongside ongoing rate hikes and underwriting improvements.[3]

Market Outlook

Home insurance costs in California are certain to rise due to recent regulatory changes by Commissioner Lara, amid a softening P&C market with diverging performance across lines into 2026. While overall capacity expands and premium growth slows, elevated claims from catastrophes and social inflation continue pressuring profitability.[4][5]