EXECUTIVE SUMMARY
Seeing the whole board
Market conditions remain favorable, but pricing improvements are slowing and outcomes are becoming more segmented by risk, industry, and carrier appetite. Buyers have a range of options, but the strongest outcomes will come from using today's conditions to improve long-term positioning, not simply reduce costs.
THE GOOD
Greater investment income and limited natural catastrophe activity are driving strong insurer earnings, abundant capacity, and competitive pricing.
THE BAD
Rising loss costs, social inflation, and slower growth are pressuring insurer profitability and contributing to an increasingly fragmented marketplace.
What we’re watching
+ Slowing economic growth and softening exposures
+ Underwriting discipline under pressure
+ Rising claims severity and social inflation
+ Reserve1 adequacy and casualty profitability
+ Bond yields, interest rates, and investment returns
+ Geopolitical instability and energy market volatility
+ Governance and organizational resilience
+ AI risk, adoption, and insurer scrutiny
+ The rise of distinct “mini markets” and increasingly segmented renewal outcomes
+ Facilities2, alternative risk solutions, and evolving capital deployment
New pressures on the economy
The economy remains resilient, supported by AI investments, healthcare, and consumer spending. At the same time, growth is slowing while inflation, elevated borrowing costs, and higher energy costs weigh on consumers and businesses. Geopolitical tensions could quickly disrupt an otherwise stable outlook.
What we’re seeing in major lines
Across most major lines, buyers continue to benefit from abundant capacity3 and strong carrier appetite. Greater selectivity is emerging across several segments, making it difficult to apply one label to market conditions.
PROPERTY
continues to soften, with abundant capacity supporting rate reductions, although the pace of improvement may be slowing.
WORKERS’ COMPENSATION
remains profitable and predictable, but rising medical and indemnity costs are narrowing margins.
LIABILITY
is benefiting from increased competition, but market conditions vary by buyer, industry, and carrier.
Public company directors & officers liability (D&O)
remains stable, with carriers placing greater emphasis on profitability, governance, and financial performance.
Private company & nonprofit D&O
remains broadly favorable, though insurers are becoming more selective around distressed and complex risks.
Employment practices liability (EPL)
is becoming more challenging, as carriers respond to rising claims frequency, severity, and defense costs.
Fidelity/crime
remains well capitalized, but insurers are increasingly focused on AI-enabled fraud and social engineering risks.
Fiduciary liability
continues to attract insurer interest, supported by ample capacity despite ongoing litigation activity.
CYBER
remains buyer-friendly, but insurers are increasing their focus on AI-related threats, privacy exposures, and cyber controls as loss drivers evolve.
Rate changes by line (Q2 2026)
Property
Workers’ compensation (guaranteed cost)
Workers’ compensation (loss-sensitive)
General liability
Auto liability
Lead umbrella
Excess liability
D&O (public companies)
D&O (private companies & nonprofits)
EPL
Fidelity/crime
Fiduciary liability
Cyber
Source: Lockton P&C Edge Benchmarking Report, Council of Insurance Agents & Brokers (for general liability and auto liability only).
Median rate changes year over year shown, except for general liability and auto liability (average rate changes year over year shown).
Total program rate changes shown for D&O, EPL, fidelity/crime, fiduciary liability, and cyber.
The insurance market for data centers remains highly favorable to buyers, who are benefiting from competitive pricing and greater flexibility.
As underwriting and regulatory scrutiny increases, organizations can capitalize on market conditions by leveraging specialized expertise.
Today’s market conditions create an opportunity to do more than reduce insurance costs. As insurers become more selective and place greater emphasis on governance, resilience, and risk quality, buyers can use favorable conditions to strengthen risk financing strategies while they still have flexibility and leverage. The organizations that look beyond the next renewal and focus on long-term positioning will be best prepared when conditions inevitably become more challenging.
Policyholders should:
- Evaluate insurers’ long-term appetite, coverage quality, and claim performance alongside pricing considerations.
- Demonstrate strong governance, crisis preparedness, and oversight of emerging risks such as AI and cyber.
- Assess exposures holistically, recognizing that many risks can impact multiple lines of coverage simultaneously.
- Revisit retentions, limits, collateral, alternative risk solutions, and program structures while capacity remains abundant.
1Reserve: Money set aside to pay future obligations. In P&C insurance, reserves most commonly refers to amounts established for reported claims, claims that have been incurred but not yet reported, and related claim expenses. (See glossary.)
2Facilities: A structured insurance arrangement through which pre-negotiated coverage and capacity are made available for a defined class or portfolio of risks, typically using standardized terms, underwriting criteria, pricing parameters, and participating insurers. Facilities are generally designed to improve consistency, efficiency, and access to capacity. (See glossary.)
3Capacity: In P&C insurance, capacity refers to the maximum amount of risk an insurer, reinsurer, or the overall market is willing or able to underwrite. Capacity is determined by capital levels, risk appetite, pricing adequacy, and regulatory constraints. It can apply to policy limits, total exposure, or the number of policies written within an individual line or geographic location. (See glossary.)
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