February 27, 2026
The commercial insurance market is showing significant softening in many property and reinsurance lines going into 2026. After several years of hard rate increases, insurers and reinsurers are now offering more favorable pricing and terms for many real estate risks, especially property catastrophe and treaty reinsurance coverage.
This change is driven by greater capital capacity, which means insurers and reinsurers currently have more financial reserves and investor backing available to write new policies and take on risk. Combined with increased competition and lower-than-expected claims in recent years, this has helped push pricing down.
However, not all lines are improving equally. Coverage related to liability exposures (such as general liability, umbrella/excess liability, and casualty risks) remains tight and expensive, with insurers still pushing for rate increases, higher retentions, and stricter terms.
In short, many property-focused risks are seeing pricing relief, while liability and casualty risks have not yet softened in the same way.
More capital has flowed into both primary insurance and reinsurance markets. This means insurers and reinsurers have stronger balance sheets and more funds available to write policies and take on risk. When carriers have more money available, they compete more aggressively for quality real estate accounts. Increased competition typically leads to better pricing, broader terms, and more flexible underwriting.
Because there is more capital chasing the same or fewer property risks, pricing pressure moves downward—which is why property insurance rates are softening.
Recent catastrophe activity has been more manageable than prior peak years. While there were losses, they were not severe enough to significantly erode insurer or reinsurer capital. When carriers avoid major unexpected losses, they do not need to rebuild reserves through aggressive rate increases. Instead, they can afford to reduce pricing to stay competitive.
Since catastrophe losses have not materially strained balance sheets, property catastrophe pricing is easing, contributing to the broader softening in property lines.
Liability lines operate under very different dynamics. Social inflation, rising litigation costs, and larger jury verdicts continue to pressure casualty insurers. Claims in these lines tend to develop over many years, and loss severity has been increasing. Because liability losses remain unpredictable and costly, insurers are not seeing the same balance sheet relief they are seeing in property.
As a result, carriers are holding firm on pricing, pushing for rate increases, and tightening underwriting which is why liability lines have not softened even while property has.
Property insurance is softening because insurers and reinsurers have more capital, fewer recent catastrophe losses, and stronger competition. That combination is pushing rates down and improving terms for many real estate owners. Liability insurance is not softening because legal costs, large jury verdicts, and long-tail claims are still putting pressure on carriers. Until those trends stabilize, liability pricing will likely remain firm.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
