The US property insurance market enters 2026 following a volatile 2025, according to USI's Commercial Property & Casualty Market Outlook.
Global insured natural catastrophe (CAT) losses exceeded $107 billion, a significant figure but below the $150 billion projected midyear. While early 2025 saw unusually high CAT losses, major hurricanes expected in the second half either missed the US or moved offshore, mitigating potential disaster-related claims. Renewal pricing improved in late 2025, while single-insurer placements mostly held flat or saw modest decreases, as shared or layered placements experienced relief of 10% to 30%, or more.
CAT deductibles remained stable in the Midwest, though inland named storm deductibles eased. Wildfire risk remained tightly managed, with mitigation, defensible space and risk scoring influencing insurability. Insurers also scrutinized older frame apartments, wind-exposed locations, subsidized housing and food manufacturing risks.
Early 2026 trends
The property market is expected to remain competitive in early 2026. Rate softening will likely continue across single-carrier placements and shared or layered programs, particularly for high-quality, low-loss risks. Insureds may benefit from increased capacity by securing higher policy limits, more favorable deductibles, improved terms and reduced exclusions.
Consolidation of multiple locations under master policies, or the use of parametric coverage to reduce CAT retentions, is also becoming more feasible.
Capital and reinsurance support
Ample capital in both traditional and alternative channels supports market stability.
Alternative capital, including sidecars, insurance-linked securities and catastrophe bonds accounted for roughly $121 billion in 2025. Favorable loss ratios and a relatively quiet hurricane season have attracted additional capital, allowing reinsurers to offer favorable treaty renewals while maintaining financial resilience despite potential future CAT losses.
Valuations and inflation pressures
Replacement cost valuations remain elevated due to ongoing inflation in materials, labor and supply chain pressures. Commercial reconstruction costs increased 4.4% year-over-year nationally, with some states rising above 7%.
According to the report, insureds are advised to update values annually to prevent underinsurance and ensure coverage adequacy, particularly in areas exposed to wildfires or other natural disasters.
Caution with new program offerings
The market has seen a surge in new program structures, including follow facilities, shared-limit, and multiline programs.
While these can offer cost savings, insureds should evaluate limit adequacy, financial strength of insurers, loss funding arrangements, third-party acceptance and program experience to avoid exposure to unexpected losses.
The outlook for 2026 is one of competitive rates, ample capacity, and continued opportunities for strategic placement, though careful risk evaluation remains essential, according to the report.
