Insurance Market Trends: Softening Conditions and Premium Dynamics

Editors have highlighted significant trends in the insurance market, noting a shift towards softer conditions. The Council of Insurance Agents & Brokers' Market Index for Q4 2025 reveals minimal growth in commercial property and casualty premiums, with a modest 0.2% rise. This reflects a decrease from a 1.6% increase in Q3. Nearly every sector experienced this softening trend, with nine lines of business, including commercial property, cyber, and workers' compensation, seeing premium reductions.

Despite these trends, commercial auto and umbrella insurance maintained premium growth. According to the CIAB, commercial auto premiums rose by 6.6%, marking the 58th consecutive quarter of increases. AM Best attributes this sustained growth to rising average claim costs, driven by factors such as social inflation and larger jury awards, which limit carrier capacity and push premium rates higher.

Conversely, directors and officers liability insurance premiums saw a decline, decreasing by 3.8% in Q4 2025, consistent with an eight-quarter downward trend. Increased carrier capacity and highly favorable loss ratios in 2024 have led to more competitive pricing. However, AM Best's 2026 report suggests potential stabilization in D&O pricing pressures.

Premium changes varied across company sizes. The most evident softening occurred in large and medium account segments. Large account premiums dropped by 2.1%, marking the first decline since the soft market of 2017, while medium account premiums remained unchanged. CIAB member firms reported increased competition and carrier capacity, reducing pricing pressures. As one Northeastern firm respondent noted, "More competition, mostly on the upper middle market and large," drives premiums downward.

In contrast, small account premiums rose by 2.8%, surpassing other segments despite prior moderation. This disparity highlights varied market dynamics, with smaller accounts facing upward pressure, while larger accounts benefit from enhanced competition. Evolving prescription patterns in workers' compensation and risk management leadership reflections further influence the industry's landscape. These developments underscore the importance of adapting to a changing market.