PROPERTY

Quiet 2025 fuels competitive 2026 market

Property capacity remains ample, with carriers actively pursuing growth and reinsurance costs continuing to ease, creating favorable conditions for buyers. This is reflected not only in pricing improvements but in opportunities for improved terms and conditions and deductibles. In the fourth quarter of 2025, median property insurance rates fell 6.2%, according to Lockton data. (See Figure 11.)

In many respects, property market conditions entering 2026 closely resemble those seen through much of last year. Insurers reported strong underwriting results in 2025, which reinforced appetite for property risks and encouraged additional capacity to the entire market, including from MGAs and the excess and surplus sector. Compared with casualty lines, which face long-tail uncertainty and social inflation pressures, property continues to be viewed by many insurers as an attractive class of business.

Rates are down from recent highs but still generally considered adequate by insurers. For the first time since 2015, no hurricane made landfall in the U.S. in 2025; this, combined with strong underwriting results, may be masking the inherent potential for catastrophe volatility, but softening reinsurance pricing provides some additional room for carriers to compete.

Jan. 1, 2026, treaty renewals delivered double-digit rate relief for many primary carriers, helping support continued competition. The largest reductions remain available to buyers of shared and layered programs, where competition is the strongest. Layered deals15 allow insurers to limit catastrophe aggregation,16 encouraging broader participation and competition. Beyond layered programs, we also expect healthy competition in the single-carrier space in 2026 as insurers pursue growth and defend market share.

Although market conditions remain favorable for buyers, risk quality continues to play a key role in achieving the best outcomes. Insurers are not scrutinizing valuations as intensely as they did prior to 2025, but accuracy remains a factor in underwriting decisions. Certain occupancies also continue to face greater scrutiny, including food and beverage operations and wood frame construction. High-quality exposure data and sophisticated catastrophe modeling are increasingly helping well-prepared buyers differentiate themselves in the underwriting process.

Insurers remain cautious about supply chain exposures, for which accumulation risk and limited underwriting information create uncertainty. Carriers are generally reluctant to offer broad coverage for physical damage resulting from cyber events.

The California wildfires — which produced a record $40 billion in insured losses in 2025, according to the Swiss Re Institute — were a stark reminder that a favorable rate environment does not always reflect a favorable loss landscape. Despite the lack of major U.S. hurricane losses in 2025, global insured catastrophe losses from natural catastrophes still topped $100 billion for the sixth consecutive year. (See Figure 12.)

Many of these losses, particularly in the U.S., were driven by wildfires, severe convective storms, and hail. These have often been referred to as “secondary” perils, but 2025 demonstrated that they no longer deserve that label.

As a result, insurers continue to manage catastrophe exposures carefully, with particular attention given to wildfire risks. Most insurers are also seeking higher deductibles for properties with greater exposure to severe convective storms or hail.

Recommendations

Look to differentiate risk from the masses. Continued progress toward and investment in risk improvements, demonstrations of strong business continuity and hazard mitigation plans, and attention to complete and accurate statements of values can ensure submissions are prioritized in a competitive marketplace.
Work with brokers to identify renewal priorities. Determine what’s most important — whether it is price reductions, expanded coverage, or lower deductibles — and approach the market with clear direction and in a timely manner.
Deliver a clear message to underwriters. Highlight any lessons learned from recent losses and improve standing by showing confidence to underwriters.

**Note: Rate ranges presented here reflect expected renewal outcomes — as of the Lockton Market Update publication date — over the next quarter for most insurance buyers. These should not be taken as a guarantee of any specific results during renewal negotiations. Depending on risk profiles, loss histories, account specifics, and other factors, individual buyers may renew their programs outside these ranges.

15Layered deal: An insurance structure in which coverage is built in layers above a primary policy. Each layer may be provided by a different insurer and attaches at progressively higher loss levels, creating a comprehensive tower of coverage. (See glossary.)

16Catastrophe aggregation: The process by which insurers evaluate how losses from a single catastrophic event, such as a hurricane or earthquake, could accumulate across multiple policies, lines of business, or regions. Aggregation analysis is essential for capital management and reinsurance purchasing. (See glossary.)