P&C Report: 2026 Q2 Outlook

INTRODUCTION

The Property & Casualty (P&C) market enters Q2 2026 in a period of stabilization, with softening conditions and increasing competition across the market. While rates are moderating, underwriting discipline remains in place, and carriers continue to prioritize risk quality and well-structured submissions. 

On the Property side, conditions are competitive but not aggressively soft. Strong industry performance underscores this environment, with the U.S. insurance sector reporting an estimated $63 billion underwriting gain in 2025—more than double the $23 billion recorded in 2024, according to Verisk. A relatively mild catastrophe (CAT) environment over the past two years—particularly across the Atlantic hurricane seasons—has contributed to increased carrier participation and greater flexibility in certain areas. However, the market remains sensitive to CAT activity, beyond just hurricanes, including severe convective storms, temperature extremes, and wildfires that can result in a single significant event quickly influencing pricing and capacity. 

Casualty presents a more complex picture. While pricing is generally stable, underlying pressures persist. Social inflation, litigation trends, and rising loss severity continue to influence underwriting decisions, particularly in higher-risk sectors such as Habitational, Transportation, and Liquor Liability. Carriers remain focused on maintaining discipline, even as competition increases. 

At a broader level, the current environment reflects a more competitive marketplace, with carriers re-entering select segments and expanding appetite in targeted areas. This has led to more aggressive pricing and, in some cases, broader coverage offerings. However, underwriting remains selective, and outcomes depend heavily on submission quality, risk presentation, and broker engagement. 

Several additional trends are shaping the market: 

Technology Driving Faster Execution 

Artificial intelligence and API-driven platforms are improving speed to market, particularly within the binding authority space where rapid turnaround time is critical. These tools are also enhancing underwriting precision and market selection, improving data quality, and driving greater efficiency across the industry. In a recent interview with The Insurer, Burns & Wilcox President Danny Kaufman highlighted how teams are deploying AI tools to deliver faster, more informed client outcomes, while H.W. Kaufman Group CIO Rich Fusinski detailed in Insurance Business America how investments in automation, data exchange, and AI are modernizing our specialty insurance operations. 

Carrier Re-Entry and E&S Strength 

Admitted carriers are beginning to re-enter certain segments, though activity remains targeted rather than widespread. Structural limitations around rate and form flexibility continue to position the Excess & Surplus (E&S) market as a key solution for complex and non-standard risks. 

At the same time, the E&S market continues to expand, supported by strong capacity and increasing demand for flexible, customized coverage solutions enabled by freedom of rate and form. 

Diverging Carrier Strategies 

Carriers with higher premium volume remain hyper-focused on profitability and underwriting discipline, avoiding a “race to the bottom” for underpriced risks. In contrast, many mid-sized carriers and MGAs are pursuing topline growth opportunities, particularly in smaller and underserved segments. This dynamic is increasing competition while maintaining a disciplined underwriting environment. 

Expanding Parametric Solutions 

Parametric solutions are gaining traction as a flexible tool for managing catastrophe-related exposures. Unlike traditional coverage, parametric policies trigger payouts based on predefined metrics—such as rainfall levels or flood depth—rather than actual loss, enabling faster claims resolution and improved liquidity following an event. 

Burns & Wilcox has introduced a Parametric Flood solution designed to complement traditional Flood and Property policies. The customizable, data-driven product provides flexible payouts that can be used for property damage, business interruption, and recovery costs. 

Growth in Global Solutions 

Demand is rising for solutions that address complex, high-value, and multinational risks. Access to global markets, including Lloyd’s and the broader London marketplace, is providing additional capacity and flexibility—particularly for risks that fall outside traditional underwriting models.  

Burns & Wilcox is delivering on this demand by leveraging Burns & Wilcox Global Solutions to provide clients with seamless access to international markets and coordinated cross-border placements. This includes growth in specialty Personal Insurance solutions, such as coverage for high-value homes and internationally exposed risks. See the U.S. Personal Insurance section for more information on our new multinational High-Value Homeowners offering, developed in collaboration with Burns & Wilcox Global Solutions. 

RATES

P&C rates are moderating, with a competitive environment across most lines. Property pricing is decelerating rapidly following several years of profitability and a mild catastrophe environment, though it remains sensitive to future CAT activity. 

Casualty rates, while stabilizing, are inconsistent based on various factors such as class of business, jurisdiction, line of business, limit and more. Broadly speaking, modest increases exist in most segments; however, underlying loss trends—including social inflation, litigation funding, and rising claim severity—still limit downward rate pressure, particularly in higher-risk sectors. 

CAPACITY

Capacity is strong across most sectors, driven by healthy carrier balance sheets and improved reinsurance conditions. Increased competition is expanding placement opportunities, particularly for well-managed risks. 

The E&S market remains a key source of capacity for complex risks, while admitted carriers are selectively re-entering certain segments. While capacity remains more limited in higher-risk areas, including Habitational, Assault & Battery, Firearms, and Auto, Burns & Wilcox provides unparalleled global market access ensuring desired limits are secured. 

TERMS & CONDITIONS (T&C)

Terms and conditions remain disciplined, particularly in higher-risk and CAT-exposed segments. While some flexibility is emerging in deductibles and coverage structure, variations in exclusions, sublimits, and policy language persist. Careful review of coverage remains essential to ensure alignment with each risk profile. 

Contributor: Paul G. Smith, Group Senior Vice President, H.W. Kaufman Group, New York, NY

Personal Insurance:

The Personal Insurance market is experiencing increased competition and improved underwriting flexibility following a relatively mild CAT environment in recent years. Increased carrier participation—particularly in coastal and historically CAT-exposed states such as Florida, Texas, and California—is contributing to softer conditions in select segments. 

Deductible flexibility has improved in wind-exposed regions, reflecting both competition and stronger carrier performance. However, many insureds continue to retain higher deductibles or utilize buy-down options as part of broader risk management strategies to manage premium costs. 

Demand in the high-value housing market is expanding as residential property values rise across both traditional and emerging markets. Higher limits are driving demand for more specialized coverage structures, leading to the introduction of a new Contents-Only Insurance solution with the ability to schedule Personal Articles on the same policy. This approach separates contents exposure while allowing greater capacity to be allocated toward the dwelling structure. Flood Insurance is also seeing increased demand, particularly for high-value homes requiring limits beyond traditional options such as the National Flood Insurance Program (NFIP). 

New Solution for Multinational Homeowners 

As client needs evolve, demand is increasing for solutions that address international exposures. High-net-worth individuals are investing more frequently in properties outside the United States, creating complexity in coverage placement and claims handling. 

In response, Burns & Wilcox has introduced a multinational Homeowners Insurance solution—developed in collaboration with Burns & Wilcox Global Solutions—designed to provide consistent, cross-border coverage for clients with global property portfolios. This offering streamlines coverage across multiple jurisdictions, delivering a cohesive solution for internationally exposed risks. 

Key features include: 

• Coverage for properties across Europe, accommodating a range of risks from traditional flats to multimillion-dollar estates 
• Flexible coverage structures tailored across jurisdictions to address varying regulatory and exposure considerations 
• The ability to include Auto Coverage alongside the Homeowners policy, supporting clients who maintain vehicles at international residences 
• Capacity for properties under construction or renovation, addressing the common need to modernize historic homes 

Home Hardening and Risk Mitigation 

Home hardening has evolved from a best practice to a standard underwriting expectation, particularly in CAT-prone areas. Measures such as impact-resistant materials, defensible space, and water shutoff devices are increasingly influencing eligibility, pricing, and capacity. 

Insureds who invest in these mitigation strategies are often rewarded with improved terms, greater capacity, and more favorable pricing. These efforts also provide underwriters with greater confidence in risk quality, supporting more flexible coverage options. 

Shifting Loss Dynamics 

The gap between attritional and catastrophic losses is widening. Attritional losses are declining due to improved risk management and mitigation strategies, while CAT losses remain elevated due to weather volatility and changing loss patterns. 

The E&S market plays a critical role in supporting Personal risks with complex profiles, including coastal properties, new construction, and high-value homes. Its flexibility and ability to provide customized solutions ensure it remains a key option for these exposures. 

Contributor: Kate Wright, Vice President, Senior Regional Practice Group Leader, Personal Insurance, Burns & Wilcox, Indianapolis, IN

Commercial Insurance:

Commercial Insurance conditions are stable overall, with modest rate movement across both Property and Casualty lines. Increased competition and selective carrier re-entry are contributing to a more competitive environment, particularly for well-performing risks. 

Despite this stability, underlying pressures persist. Social inflation, litigation funding, and rising loss severity continue to influence underwriting decisions and coverage structure. These dynamics are most pronounced in higher-risk sectors such as Habitational, Transportation, and Liquor Liability, where pricing and terms remain closely tied to exposure and loss history. 

Expanded carrier appetite—particularly in the admitted market—is improving placement options in select segments, though often with more limited flexibility in coverage terms. As a result, the E&S market remains a critical solution for complex and hard-to-place risks, offering the ability to structure coverage more creatively and address gaps left by standard markets. 

As competition increases, successful placements depend on submission quality, transparency, and the ability to clearly articulate risk. 

Structure and Coverage Trends 

In certain classes, carriers are demonstrating increased creativity in program structure. This includes the use of standalone or layered solutions to address difficult exposures—such as Sexual Abuse and Molestation (SAM)—where coverage may be excluded or sublimited under General Liability policies. This approach is particularly relevant for classes such as daycares, where SAM exposure remains a key underwriting concern and often requires specialized placement strategies to meet contractual requirements. 

Habitational: Increased Appetite, Continued Discipline 

Underwriting attitudes toward Habitational risks are starting to shift, with increased carrier appetite and re-entry across the country following a period of strict underwriting discipline. 

As rates moderate and capacity returns, carriers are showing greater willingness to deploy capital, particularly for well-managed risks. In some cases, this is resulting in more flexible underwriting approaches and improved coverage structures. 

Key exposures—such as Assault & Battery and Firearms—remain central to underwriting decisions. While sublimits and exclusions are still common, some carriers are offering more competitive terms than in prior years, reflecting increased competition and improved market conditions. 

Despite these developments, underwriting remains disciplined. Risks with adverse loss history or limited risk controls continue to face constraints, reinforcing the importance of careful review of policy terms and conditions, as well as detailed, well-structured submissions. 

Contributor: Chris Siegel, Vice President, Florida, Managing Director, Burns & Wilcox, Orlando, FL

Professional Liability:

Most Professional Liability sectors are expected to remain competitive in Q2, with rates generally stable to soft. However, “green shoots” of rate firming are beginning to emerge in certain areas of Management Liability and Cyber. 

Capacity across most Professional lines remains adequate, with additional capacity entering specific segments, often through MGAs. At the same time, increasing claims severity is driving a stronger focus on disciplined underwriting and pricing. Current events, higher energy prices, and social inflation continue to be reflected in loss trends, with economic conditions potentially adding further strain in a downturn. 

Risks demonstrating solid financial strength, sound governance, and effective controls remain better positioned to secure more favorable terms, conditions, and pricing moving into Q2. 

Management Liability 

• Primary and Excess capacity remains plentiful, with soft market conditions in the private company and nonprofit sectors. 
• Despite favorable conditions, profitability across the segment is under increasing pressure as capacity is capping rate movement while claims severity trends upward. 
• Social inflation, litigation funding, and broader cost pressures are contributing to higher settlements and rising underwriting and claims handling expenses. This trend is particularly evident in EPLI, where verdict severity continues to increase dramatically in many jurisdictions, making certain risks less attractive to more established markets. 
• Labor market uncertainty, including recent layoffs and bankruptcies, is expected to heighten claims activity, which may be further amplified as organizations accelerate the deployment of AI. 
• As a result, Q2 will likely see more green shoots of rate firming begin to sprout as carriers respond to emerging loss trends. Carriers will also continue efforts to rebalance portfolios geographically, particularly outside of California. 

Technology E&O and Cyber 

• Technology Errors & Omissions (E&O) and Cyber Insurance are increasingly converging as operational, technology, and data‑driven exposures overlap. Carriers are more frequently requiring both coverages to be placed together to help avoid potential gaps. 
• Capacity remains sufficient, with additional entrants supporting generally competitive market conditions. 
• Pricing remains highly risk‑specific and varies based on an organization’s security posture, claims history, and technical infrastructure, with underwriters maintaining a disciplined, risk‑by‑risk approach. 
• Claims frequency continues to increase, driven in part by the accelerating adoption of AI and the growing sophistication of cyberattacks. 
• Some loosening of endpoint detection and response (EDR) requirements is being observed for smaller accounts as carriers seek growth in what has been a largely profitable segment. 
• Healthcare‑related Cyber risks may see firmer pricing, as threat actors remain highly motivated by valuable data and business interruption expenses are significant.  

Healthcare Liability  

• Allied Healthcare remains a growing sector as more healthcare and healthcare-adjacent services are delivered outside traditional hospital and medical settings; double-digit growth is expected to continue in Q2. 
• Despite a broad field of carriers, many are managing loss trends by reducing capacity, tightening underwriting guidelines, and raising deductibles—particularly for historically challenging classes and areas of emerging risk. 
• The rapid evolution of alternative care therapies, when combined with a complex regulatory environment, adds complexity to underwriting and pricing. Read more about this growing sector here.  
• Social services and senior care operations remain challenging, with claims frequency and settlement severity increasing. 
• SAM capacity remains constrained across many classes, forcing coverage into the E&S market at significantly higher prices. Other high‑risk areas, including correctional operations, will face similar limitations and fewer markets participating; these segments are expected to remain firm through Q2. 

Architects & Engineers 

• Inflation continues to have a significant impact on profitability across this segment as loss costs rise, particularly for materials, remediation, and contractor and labor expenses. Ongoing supply‑chain disruptions may further exacerbate these pressures. 
• Demand for SAM coverage is increasing for trade and general contractors in certain jurisdictions, as municipalities, schools, healthcare facilities, and other organizations serving vulnerable populations require proof of coverage from third parties before work can be performed. This is driving greater interest in standalone products, with new capacity entering the market and helping to ease some of the pricing strain seen in prior periods. 

Miscellaneous Professional 

• The segment continues to benefit from a strongly competitive environment with capacity remaining adequate, limits generous, and pricing consistent. 
• More carriers are coming into the space, targeting professions such as lawyers and insurance brokers.  

Contributor: Andy Wood, Senior Vice President, Professional Liability Insurance, Burns & Wilcox, Chicago, IL 

Transportation Insurance:

The Transportation and Garage Insurance marketplace remains challenging in Q2 2026, though early signs of stabilization are emerging for well-managed risks. Carriers continue to exercise underwriting discipline as loss severity pressures persist, with rate increases still present but moderating in select segments. 

Rates remain elevated overall, particularly for fleets with adverse loss history, new ventures, and high-hazard operations. However, pricing is beginning to level for accounts with strong safety controls and clean loss experience. Capacity is improving modestly for best-in-class risks, while remaining constrained for distressed accounts. Terms and conditions continue to tighten, including higher deductibles, stricter driver qualifications, and increased use of exclusions and sublimits. 

As competition increases in pockets of the market, brokers have opportunities to remarket well-performing accounts and negotiate improved structures. Garage risks—particularly heavy truck repair, mobile operations, and non-franchised dealers—remain a growth area within the E&S space. Additionally, accounts implementing telematics, camera systems, and formal safety programs are seeing improved underwriting receptivity and more competitive options.  

Early submission and complete underwriting data are critical in today’s market. Brokers should clearly communicate safety protocols, driver screening processes, and use of telematics or cameras. Highlighting operational controls, regulatory compliance, and any improvements in loss trends can significantly impact pricing and capacity. Staying proactive with clients and setting realistic expectations around terms and pricing remains essential. 

Burns & Wilcox provides access to a broad network of transportation-focused carriers, both domestically and through our London-based team, offering creative program solutions and structuring, including layered and shared placements for complex risks. Our underwriting teams specialize in navigating difficult exposures, from distressed fleets to niche garage operations, delivering responsive and tailored solutions. 

Contributor: Renee Jones, Senior Underwriter, Transportation, Burns & Wilcox, Dallas/Ft. Worth, TX

Environmental Insurance:

The wholesale Environmental Insurance market remains competitively priced at the primary level, supported by new entrants and expanded capacity across Contractors’ Pollution Liability and Site Pollution programs. Most well-performing accounts generally renew flat, with some seeing modest decreases, reinforcing the market’s ongoing softness on first layer placements. 

That softness does not extend evenly across all layers or exposures. Excess Environmental capacity remains constrained, particularly for Auto-Heavy Contractors, Habitational risks, and Longtail Bodily Injury exposures. PFAS and ethylene oxide continue to shape underwriting decisions through exclusions, higher attachment points, and manuscripted terms, as claims severity and social inflation outweigh improvements in frequency. 

In this environment, wholesale brokers play a critical role in structuring viable programs and navigating fragmented capacity. While pricing remains favorable for disciplined risks, coverage is increasingly conditional, underscoring a market that is competitive on price but cautious on long-term Environmental Liability. 

Contributor: Beth Linton, Vice President, Environmental Brokerage, Burns & Wilcox, Brokerage Division, Atlanta, GA  

MARKET PERSPECTIVE FROM A CARRIER LENS:

As we reported in our Q1 P&C report, we continue to see the Property and Casualty markets exhibit different dynamics. 

Property 

The E&S Property market continues to soften, with declining rates, abundant capacity, and a buyer-friendly market. Rates are decreasing across all segments, with terms and conditions broadening through lower deductibles, elimination or increase of sub-limits, and expanded coverage. Additionally, we are seeing limit expansion, with carriers increasing participation and line sizes. 

The Property reinsurance market also remains soft, with significant CAT placement rate decreases reported by major reinsurance intermediaries. April reinsurance renewals saw pricing reductions in the mid to high teens, depending on the peril and geography. Despite reinsurers’ desire to maintain a degree of pricing discipline, cedants are finding capacity plentiful, with virtually all placements oversubscribed. These reinsurance rate reductions will further contribute to the softening market on the direct side. 

Casualty 

For E&S carriers, the U.S. Liability market remains both a challenge and an opportunity. As Property growth becomes even more difficult due to rapid market softening, carriers and MGAs are turning to Casualty for growth, even when signs are telling them to proceed with caution.  

Industry data shows a majority of carriers have had to strengthen U.S. Liability reserves consistently over the last 10 years. Carriers and reinsurers alike view Liability loss trends as increasing over the past few years due to rising claim litigation, claim severity, and social inflation. However, these profitability headwinds are often being offset by overcapacity in both the direct and reinsurance Casualty markets. 

As a result, while we are still seeing rate increases in the Casualty market, there is a view that rate increases are moderating across a majority of segments. The rate environment does vary by segment, though, with Auto Liability still seeing the highest rate increases, followed by Excess Liability and then General Liability. We are starting to see a greater frequency of flat renewals in General Liability, especially in classes such as contractors, office, and LRO. However, individual account rate activity is still very dependent upon class, venue, and prior performance. In this sense, there is a high degree of segmentation in the Liability market. Due to abundant capacity, with no signs of it regressing, we do expect the Casualty market to show more signs of softening in the coming year. 

Contributor: Chris Zoidis, President and Chief Executive Officer, Atain Insurance Companies, Farmington Hills, MI

LONDON MARKET:

The London market plays a critical role in supporting complex and non-standard risks, particularly where domestic capacity is limited or underwriting appetite is constrained. Demand from North America is strong, driven by the need for flexible solutions, broader coverage structures, and access to global capacity.  

Complex Property risks are a primary driver of activity, including CAT-exposed accounts, older construction, and risks with valuation uncertainty. Retail brokers are increasingly turning to London for certainty of capacity and the ability to efficiently build layered programs. 

High-hazard Casualty and large-limit Liability placements are also contributing to increased demand. Social inflation, litigation trends, and growing limit requirements when many domestic carriers are shortening limits, are pushing more risks into both the London and Bermuda markets, where underwriters are able to offer more flexible structures and bespoke solutions.  

In addition, the London market is seeing growth in emerging and evolving risks, including Cyber, Renewable Energy, and technology-driven exposures. These risks often fall outside traditional underwriting models, making London a natural fit for customized coverage solutions.  

Expanding Role in SME and Multinational Risks  

One notable shift is London’s growing role in supporting small to mid-sized enterprise (SME) Property risks, particularly in the $10 million to $25 million value range. Historically focused on larger, more complex placements, the market is increasingly competing in this segment by improving speed, efficiency, and accessibility.  

Demand for multinational solutions is also increasing, particularly for clients with exposures across multiple jurisdictions. The London market’s ability to provide non-admitted coverage and coordinate global placements continues to differentiate it from domestic markets.  

This trend is also reflected in the Personal Insurance space. Burns & Wilcox, in collaboration with Burns & Wilcox Global Solutions, recently introduced a multinational Homeowners Insurance solution designed to address the growing need for consistent, cross-border coverage. This offering highlights the Burns & Wilcox global platform in delivering coordinated solutions for internationally exposed risks. See the U.S. Personal Insurance section for additional details about this new offering.  

Technology and Market Evolution  

The London market is becoming faster and more data-driven, with increased adoption of digital placement tools and advanced analytics improving both speed to market and underwriting precision.  

These developments address historical challenges around responsiveness, making it easier for brokers to access London capacity efficiently, particularly for complex and time-sensitive placements.  

Parametric solutions are also expanding beyond traditional catastrophe applications, with new use cases emerging across a broader range of exposures.  

Outlook  

Looking ahead, demand for London market solutions is expected to grow steadily, particularly for complex, high-value, and multinational risks. As domestic carriers recalibrate appetite in certain segments, London continues to provide flexible underwriting, global reach, and efficient access to capacity for risks that fall outside standard market parameters. 

Contributors: Declan Durkan, Managing Director, Non-Marine, Burns & Wilcox Global Solutions, London, UK; Kerry Hall, Head of Burns & Wilcox Lloyd’s Products, Burns & Wilcox Global Solutions, London, UK   

CONCLUSION:

The P&C market in Q2 2026 reflects a more competitive environment, with moderating rates and expanding capacity across many lines. At the same time, underwriting discipline remains firmly in place, as carriers continue to focus on risk quality, profitability, and long-term performance. 

Property markets are benefiting from improved conditions following recent CAT stability, while Casualty lines continue to face pressure from litigation trends and rising loss severity. Across both segments, outcomes remain highly dependent on risk characteristics, loss history, and the overall quality of submissions. 

As market conditions evolve, the role of the broker remains critical. Clearly defining client needs, presenting well-structured submissions, and leveraging access to both domestic and global markets are essential to securing optimal coverage and pricing. 

Through its broad carrier relationships, specialized expertise, and integrated global platform, Burns & Wilcox is well positioned to support brokers in navigating complex risks and delivering tailored solutions in a dynamic P&C marketplace. 

Contributor: Paul G. Smith, Group Senior Vice President, H.W. Kaufman Group, New York, NY 

Disclaimer: The above information has been prepared solely for the purpose of sharing general information regarding insurance and business practice management issues. These are just our opinions and are not intended to constitute legal advice or a determination on issues of coverage.