Capacity is broadly stable heading into 2026, neither expanding meaningfully nor contracting at levels seen prior to 2024. Prior-year remediation efforts, rate adjustments, and the entrance of new MGAs have helped stabilize the market without fundamentally changing its tenor.

Still, several sources of forward-looking disruption bear close watching. Sompo’s acquisition of Aspen and AIG’s acquisition of Everest’s retail book could reshape capacity deployment in early 2026. AIG has publicly committed to maintaining Everest capacity, even where they overlap on towers. Whether this will hold beyond the first year remains to be seen.

Carriers remain especially cautious on lead umbrellas. Rate increases are stabilizing in higher excess layers, but attachment points continue to drift upward as insurers distance themselves from frequency-driven severity layers that have produced outsized losses. Several insurers have also acknowledged ongoing reserve challenges related to older accident years, reinforcing discipline in long-tail casualty and limiting appetite for aggressive limit deployment.

Auto liability remains a consistent pressure point. Organizations with larger auto fleets — 500 or more vehicles — continue to see the steepest rate increases as insurers tighten underwriting around distracted driving, nuclear verdicts, and rising repair costs. Construction and transportation companies continue to bear the brunt of this discipline.

Insurers are increasingly focusing on technology and AI-driven liability, especially privacy exposures, algorithmic bias, copyright infringement, and unintended consequences in manufacturing and autonomous systems. Buyers should expect more scrutiny of AI-related exclusions or new amendatory endorsements as insurers attempt to clarify coverage intent.

Underwriters continue to scrutinize sexual abuse and molestation and assault and battery risks in real estate, education, and healthcare, and buyers can expect broader reviews in the future. Brokers are trying to maintain “silent” positions where possible for these risks; capacity for stand-alone affirmative coverage on a claims-made basis is available for insurance buyers in these industries via the London marketplace.

Buyers are similarly pushing for silent positions on risks related to per- and polyfluoroalkyl substances. Climate-related liability — from alleged failures in risk mitigation to property damage tied to emissions — is also becoming a more frequent discussion point for insurers, even if pricing does not yet fully reflect the potential threat.

The broader litigation environment continues to complicate long-tail lines. Social inflation remains a persistent headwind, exacerbated by litigation funding and increasingly sophisticated plaintiff strategies. Underwriters are keenly aware that a single emerging trend — whether connected to AI, climate, or public health — could become the next asbestos or opioid crisis.

Economic and claims inflation continue to raise the severity baseline. Rising medical costs, attorney fees, and prolonged litigation timelines are accelerating social inflation and leaving insurers with a narrower margin for error, particularly as softening interest rates reduce investment yields that have helped offset volatility.

In May, Chubb, Zurich, and National Indemnity launched a $100 million excess casualty facility that offers coverage on a claims-made basis. While this product offers clear capacity and claim-handling benefits, adoption has been measured as buyers and their brokers evaluate the form, its pricing, and its alignment with policyholder needs. Nevertheless, this form represents an early signal that the industry may be shifting more toward claims-made triggers, especially for higher-hazard classes. Markets are looking for certainty as they seek to expose capital and price these risks.

MGAs also continue to introduce more specialized products targeting niche sectors. MGA capacity, however, remains dependent on fronting arrangements and reinsurer appetite, adding another layer of fragility to the system.

Given these dynamics, it's essential for insureds and their brokers to understand the risks associated with MGAs to safeguard against potential disruptions in capacity and claims handling. These risks can include the financial stability of fronting carriers, reinsurer withdrawal/reduced appetites, and potential delays in claims payments if any party in the chain faces solvency or liquidity challenges.