U.S. Property & Casualty Insurance Market Forecast for 2025-2026
As the property and casualty insurance sector approaches 2026, key market areas show signs of reduced pricing pressure. However, this shift is not uniform, with industry leaders viewing current dynamics as a recalibration rather than a complete shift towards softer market conditions.
Market Forecast and Premium Growth
The Swiss Re Institute forecasts that the U.S. property and casualty market will see a 5% growth in written premiums in 2025, slowing to 4% in 2026. This deceleration in pricing momentum aligns with increased competition among insurers, affecting underwriting strategies.
Current Dynamics and Sector Variability
According to Justin Foa of Alera Group, the marketplace exhibits significant variation. While certain construction and property risks see increased capacity and reduced rates, others, particularly those with recent losses or catastrophic exposures, face ongoing challenges. Foa highlights the importance of recognizing the nuances across different lines of insurance business.
Commercial Property and Risk Management
In commercial property, a resurgence of capacity is driven by investor and insurer interest, supported by underwriting profits. However, stringent underwriting remains for those with high catastrophe exposure. Meanwhile, brokers manage client expectations about rate relief and stress the importance of consistent client-carrier relationships.
Advanced Tools and Underwriting Standards
Foa anticipates rigorous underwriting standards to continue through 2026. Insurers are deploying advanced tools such as drone imagery and detailed valuation databases, which necessitate precise risk management from brokers and clients. This technological approach assists in verifying broker-provided data.
Liability and Commercial Auto Markets
In the liability segment, high-risk sectors face hard market conditions due to litigation and social inflation, whereas management and cyber liability sectors see stability brought by improved regulations. Conversely, the commercial auto segment battles persistent rate pressure driven by claims severity and legal trends. Safety programs and telematics technology are advised to improve underwriting profiles.
Strategic Management in Capacity-Constrained Markets
Brokers tackle capacity constraints in the umbrella and excess markets by strategically layering coverage to meet client needs within budget limits. Foa emphasizes tailored strategies that consider client-specific strengths and weaknesses. As the insurance landscape remains segmented and complex, brokers must guide clients through renewals with clear insights into prevailing market conditions.