Decline in Commercial Property Premiums and Market Insights 2026
Commercial property premiums across all account sizes decreased by 1.2% in the first quarter of 2026, marking the first decline since 2017, according to Alliant Insurance Services' 2026 Mid-Year Insurance Marketplace Insights and Observations Report. This comprehensive report draws from Alliant's expert broking teams across more than a dozen industry sectors, providing a thorough analysis of the current market landscape.
The mid-year market is characterized by a stark division between property and casualty insurance. On the property side, buyers are experiencing substantial rate reductions, ranging from high single digits to over 20%. Real estate sectors are even observing double-digit declines over consecutive renewals. Meanwhile, casualty insurance lines are seeing rate increases: auto liability rates are up 7% to 25%, umbrella liability by 10% to 20%, and excess liability by 8% to 18%, underscoring significant pricing disparities.
Pressures on casualty insurance arise from social inflation, nuclear verdicts, and third-party litigation funding. These factors have contributed to a 57% increase in U.S. liability claims over the last decade. Notably, the U.S. Supreme Court decision in Montgomery v. Caribe Transport II impacts the transportation sector by allowing freight brokers to be held liable for negligent carrier selection under state laws, potentially raising insurance costs.
Cyber insurance rates demonstrate relative stability despite escalating ransomware attack losses, which quadrupled in 2025 compared to 2020, and rose by 50% compared to 2024. The U.S. experienced 58% of global attacks, leading most sectors to experience flat to 5% rate decreases at renewal, except healthcare and public entities which achieved decreases of 5% to 10% or more.
Insurance-linked Securities and Parametric Insurance Growth
The insurance-linked securities (ILS) market achieved a record issuance of $25.6 billion in 2025, up 44.6% from 2024, reaching an outstanding $61.3 billion. Early 2026 saw issuance hit $15.5 billion. Meanwhile, the parametric insurance market, valued at over $19 billion globally in 2025, is anticipated to grow significantly over the next decade. This market has expanded its coverage beyond traditional triggers like windstorm and earthquake to include cyber, drought, and temperature-related risks.
Captive insurance remains a viable relief avenue amid challenging liabilities, with an estimated 7,000 to 8,000 licensed captive insurers. Nearly 50,000 organizations might be involved in group captive arrangements, driven by factors such as labor and reinsurance market pressures. In the healthcare sector, professional liability rates are surging by 8% to 35%, posing coverage challenges.
The construction sector is witnessing growth driven by data centers and AI infrastructure demands, complicating insurance placements, especially in casualty, auto liability, and umbrella coverage. Meanwhile, the life sciences industry is experiencing an upswing in biopharma deals, with over $90 billion in deal values through the first three quarters of 2025, surpassing previous years.
A report from Verisk and the American Property Casualty Insurance Association indicated a $63 billion underwriting gain for the U.S. property and casualty industry in 2025, primarily due to lower catastrophe losses rather than enhanced risk management. Real estate sectors, particularly offices, face deepening distress, with Trepp reporting a commercial mortgage-backed securities delinquency rate of 7.47% in January 2026. Buyers with robust data and documented risk controls are better positioned to secure favorable terms.