As the property and casualty (P&C) insurance sector enters 2026, brokers are seeing strong signals of easing pricing in select pockets of the market. However, at least one leader sees a market in recalibration rather than a dramatic turn toward soft conditions.
The Swiss Re Institute’s US P&C outlook for 2025-2026 states that direct premiums written are expected to grow by 5% in 2025, decelerating to 4% in 2026, reflecting slower pricing momentum and increased competition among carriers.
But according to Alera Group’s P&C leader Justin Foa (pictured), unlike past cycles where rate pressure eased industry-wide, today’s softening is highly uneven: some constructions and property risks are seeing capacity and rate relief, while others, often those with recent losses or CAT exposures, remain challenged.
The highly segmented nature of current trends, with variations not only by line of business, but also by niche, account quality and risk profile, makes generalized market assumptions less useful than tailored, expert guidance.
“It is really a matrix now,” Foa told Insurance Business. “It is not just ‘construction is hard, but food is not.’ It is ‘construction, but these types of construction accounts are soft, and these are still hard.’ Each line of business has its own nuance, which I think is important.”
On the commercial property side, Foa argued that capacity is genuinely coming back, driven by investors and insurers attracted by recent underwriting profits. This renewed capital supply is pushing rates down for well-performing risks, and such conditions are expected to persist.
However, accounts with a history of losses or exposure to catastrophes such as wildfires (especially in California and other West Coast jurisdictions) continue to experience tighter underwriting and pricing discipline.
“When you look at the scale of those losses (from the LA wildfires), the industry was able to absorb it,” Foa said. “[Underwriters] are going to be very careful there, and that is going to be a continued place of hardening.”
For brokers, Foa said, the key challenge is managing client expectations around where rate relief is real versus where pressures persist. That means explaining that a 7% renewal decrease for a mid-market client might be good relative to their own profile, even if broader property rates are declining faster. He pointed out that frequent remarketing can damage a client's reputation with carriers unless there’s genuine upside potential, so brokers must balance cost, time, and risk.
One notable trend Foa is seeing: Smarter mid-market buyers commissioning independent risk and loss-control surveys rather than relying solely on carrier field visits.
“Historically, a middle market client would have insurers come out, look at their main facilities, and give them recommendations, which they would typically try and negotiate in terms of what was economically feasible and risk imperative,” he explained. “Now we are seeing clients get their own independent risk surveys.”
This approach allows clients to showcase strengths (e.g., strong safety metrics or valuation accuracy) to more underwriters without repeated site tours, improving competitive positioning efficiently. “It is an investment to put those reports together, but we are finding that in many cases, it is valuable,” Foa added.
One thing appears certain for 2026: Underwriting standards remain rigorous, with underwriters increasingly verifying broker-provided information using third-party sources, be it drone footage, expansive valuation databases, or enhanced construction information tools.
As carriers place greater emphasis on robust risk files, Foa said, brokers and clients must demonstrate verifiable risk controls and accurate valuations to appeal to underwriting appetites.
On the liability side, Foa expects the hard market to continue in certain high-risk sectors, particularly where litigation severity and social inflation remain headwinds.
By contrast, segments such as management liability and cyber liability are experiencing greater moderation, partly due to enhanced regulatory frameworks and clearer risk models, illustrating the ongoing segmentation within casualty lines.
Commercial auto remains one of the toughest segments, with continued rate pressures driven by claims severity and broader legal trends. Foa advised clients to invest in robust safety programs, telematics, and documentation to strengthen their underwriting profile.
“What we are seeing is that if you have that commitment as a client to safety and to recording and looking at what is happening in accident situations, and you can prove that to a jury, you are not seeing these mega claims,” Foa said. “Underwriters are flocking to those types of risks… risks that are more sophisticated, that really care about it, that have a professional fleet.”
Meanwhile, capacity pullbacks in umbrella and excess markets are forcing brokers to be more strategic in layering coverage, balancing client needs against pricing realities. Foa describes this as a complex “puzzle,” where brokers must combine various primary and excess offerings creatively to deliver strong protection without overpaying.
Ultimately, Foa’s advice for brokers reflects the overall theme of targeted engagement: understand where your client’s specific strengths and weaknesses lie and develop a strategy that aligns coverage with competitive pricing. In a mixed, segmented environment, tailored approaches trump broad assumptions.
“The broker needs to explain the marketplace to (the client) and what the options are going to be going forward, and then also explore those options together in a thoughtful way throughout the renewal process,” he said.
