For the past three quarters, pricing improvements have been most evident in shared and layered placements, but we are now seeing more movement in single-carrier deals. Incumbent insurers continue to deploy capacity to preserve premium volume, while new entrants — MGAs, in particular — are stepping in to serve niche segments, such as real estate and excess property.

First-party business has remained profitable for several years, while reinsurance pricing has improved. While some may be tempted to call the current market “soft,” current reductions follow more than seven years of significant rate increases. Rates may still have some room to move from these highs, although insurers will begin to show concerns about pressure on margins.

Underwriters are maintaining discipline where conditions warrant, especially for insureds with heavy catastrophe exposures, with recent losses, and in challenged occupancies. Large limits for contingent time element coverage are increasingly difficult to secure. By contrast, insurers are showing greater appetites for middle market buyers with limited catastrophe exposure and in benign occupancies. They are also expressing interest in shared and layered programs.

Although the claims environment is relatively stable, the first half of the year produced sizable losses, notably from the California wildfires. The Atlantic hurricane season has, to date, been relatively mild, but forecasters have predicted an active season — and there are still several weeks remaining.

Valuations remain a secondary focus for most insurers, although inflation trends are being closely monitored. A resurgence in inflation — whether as a result of tariffs, supply chain disruptions, or other market influences — could bring renewed scrutiny around reported values. Policyholders with risk improvement philosophies continue to mitigate risk, but most are not giving significant attention to valuation reporting as a priority given limited pressure from insurers.

Looking ahead, sizable hurricane losses this year could slow the pace of rate softening, although this could be counteracted by ample capacity and year-end premium targets. Barring a major windstorm or other significant event, we expect the buyer’s market to continue through the fourth quarter.

It is difficult to predict what exactly could flip the marketplace. There is already ample evidence that multiple events aggregating to $150 billion in insured losses will not dislocate the market, but as rates continue to decline, that could change. At this point, we anticipate that a single unexpected event that erodes capital and earnings for both primary insurers and reinsurers would at least slow the market’s momentum.