P&C Report: 2026 Q3 Outlook

INTRODUCTION

The P&C Insurance marketplace enters the second half of 2026 with a distinctly different outlook than just a few years ago. Increased capacity, decelerating Property rates, and heightened competition are creating new opportunities for brokers, agents, and insureds. 

In this environment, brokers and agents are increasingly revisiting accounts placed during the hard market, evaluating whether broader options may now be available, and positioning well-documented risks for stronger underwriting outcomes. 

Competition is intensifying across many segments as admitted carriers expand their appetite and global insurers deploy additional capacity into the United States. In several Property segments, these dynamics are creating more favorable conditions for well-positioned risks, while also raising questions about how long current pricing levels can be sustained. While one large global P&C insurer announced in late June it would not be chasing property rates any lower, a contrary consensus follows the pivotal July 1 treaty reinsurance renewals which are suggesting 20–25 % rate reductions, according to The Insurer. 

Liability, however, continues to present a more challenging environment. Auto Liability remains one of the hardest segments, with many insureds experiencing double-digit rate increases.  

While pricing has become more competitive across many lines, underwriting discipline remains firmly in place. Carriers continue to emphasize submission quality, accurate valuations, risk selection, transparent risk narratives, and consistent policy terms as they compete for business. 

Despite broader market trends, no single narrative applies across every account. Geography, loss history, occupancy, construction, valuation, and individual risk characteristics continue to drive underwriting outcomes, making account-specific evaluation more important than ever. 

Against this backdrop, the Excess & Surplus (E&S) market remains well positioned to address specialty, complex and difficult-to-place risks. As underwriting appetites continue to shift, Burns & Wilcox remains a valuable resource for brokers and agents, offering broad market access, strong carrier relationships, and specialized expertise to help secure effective coverage solutions. 

RATES

Rate trends are diverging across the P&C marketplace. Commercial Property and many Personal Insurance segments are benefiting from increased competition and abundant capacity, resulting in decelerating rates and expanded options for many insureds. However, pricing remains highly dependent on individual risk characteristics, including catastrophe exposure, loss history, and property-specific factors. 

Liability presents a different picture, with many Casualty lines experiencing flat to upward rate pressure driven by social inflation, litigation trends, and rising claim severity. As a result, brokers and agents may see mixed outcomes across accounts, with more favorable Property pricing offset by continued pressure in Liability-driven placements. 

Although the overall market has become more competitive, carriers remain disciplined in their underwriting approach, placing a strong emphasis on risk selection, accurate valuations, and complete underwriting submissions. 

CAPACITY

Capacity remains abundant across most of the P&C marketplace, driven in part by increased participation from the London and Lloyd’s markets, along with other global insurers seeking a larger share of U.S. business. The U.S. accounts for 45% of worldwide insurance premium volume, according to a 2025 National Association of Insurance Commissioners report, making it the world’s largest insurance market. That position continues to attract international capital seeking opportunities in the P&C space. 

With fewer major catastrophe losses in recent years and U.S. property claim volume declining 8.9% in the first quarter of 2026, according to Verisk, carrier confidence has improved, contributing to broader capacity across Property segments. Even so, capacity is being deployed selectively, particularly for higher-hazard Property and Liability risks. 

TERMS & CONDITIONS (T&C)

Although pricing has become more competitive across many segments of the P&C marketplace, underwriting discipline remains evident in policy terms and conditions. Carriers continue to manage exposure through tightly crafted policy language, exclusions, sublimits, deductibles, and other coverage limitations, particularly for emerging and higher-hazard risks. 

AI is one of the latest areas receiving increased scrutiny, with carriers evaluating a range of approaches, including endorsements, affirmative coverage solutions, and AI-related exclusions or sublimits as the market continues to evaluate this evolving exposure. As with other emerging risks, policy language is expected to evolve as underwriting and claims experience develop. See the Professional Liability (U.S.) section for additional insights into AI-related liability exposures. 

Beyond AI, coverage limitations remain most pronounced across certain high-risk classes, coverages, and exposures, including Asbestos, Directors & Officers (D&O), Errors & Omissions (E&O), Auto Liability, and Habitational risks, and are expected to persist for the foreseeable future. 

As pricing becomes more competitive, brokers and agents should continue to review policy terms carefully, including exclusions, sublimits, deductibles, and endorsements, to confirm that improved pricing does not come with unintended coverage limitations. 

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

Personal Insurance:

The Personal Insurance market remains competitive as pricing stabilizes and admitted carriers expand their appetite for many standard risks. Two relatively mild catastrophe seasons have supported increased competition, although the market remains highly sensitive to severe weather, wildfires and related CAT events, as a single significant event could quickly alter pricing and capacity. Regional catastrophe trends continue to shape these dynamics, with impacts varying significantly by geography. See the Commercial Insurance (U.S.) section for more detail.  

As rates approach technical pricing floors, or levels carriers view as necessary to maintain profitability, carriers are placing greater emphasis on underwriting discipline, risk selection, long-term profitability, and attritional loss performance. Submission quality, accurate property valuations, and proactive risk management, recently referenced by us as “home hardening,” remain important differentiators as carriers pursue profitable growth. 

Trends shaping the Personal Insurance market include: 

• Expanded opportunities for E&S: As admitted carriers assume more standard business, the E&S market is returning to its traditional role of providing solutions for complex and difficult-to-place risks, giving brokers and agents greater access to specialized markets and coverage solutions for clients with unique or higher-risk exposures. 
• Greater emphasis on risk mitigation: Loss prevention remains a key underwriting consideration. Carriers are placing more focus on measures such as automatic water shutoff devices, wildfire defensible space, fortified roofing systems, and other property protection features that help reduce claim frequency and severity. 
• Data-driven underwriting: Carriers are increasingly using advanced data analytics, Large Language Models, and AI to refine pricing, strengthen risk selection, and identify risks that align with their underwriting appetite. These technologies are also supporting more targeted underwriting strategies and specialized coverage solutions. 
• Flood Insurance warrants increased attention: Recent flood events continue to reinforce that significant flood losses can happen anywhere, not just designated flood zones. According to a recent Moody’s report, uninsured residential flood losses could range from $375 billion to more than $1 trillion depending on event severity, with protection gaps of about 65%. As weather patterns evolve and flood exposures become more difficult to predict, brokers and agents should review coverage needs carefully and evaluate Flood solutions.  

As conditions remain competitive, brokers and agents are increasingly revisiting coverage decisions made during the hard market. Higher deductibles, water damage limitations, reduced optional coverages, and other restrictions that were once necessary to secure coverage may no longer be the best fit for every client. 

Contributor: Ryan Connolly, Regional Practice Group Leader, Personal Insurance, Burns & Wilcox, Nashville, Tennessee

Commercial Insurance:

Commercial Insurance market conditions are becoming increasingly competitive, creating new opportunities across many lines of business. Even so, broad market trends rarely apply equally across all risks, with pricing and underwriting outcomes varying based on geography, catastrophe exposure, construction, occupancy, protection, and exposure (COPE), loss history, and other individual risk characteristics. 

With relatively mild catastrophe seasons over the past several years persisting into this year, Property market conditions continue to rapidly soften. A significant catastrophe event, however, could quickly reshape pricing, capacity, and underwriting appetite. Regional catastrophe trends continue to influence underwriting decisions, pricing, and capacity across the U.S.: 

• Gulf and Atlantic Coasts: Due to prolonged lack of significant catastrophic events, competition has increased following strong capital influx into the marketplace, resulting in an abundance of risk-taking capacity and significantly reduced pricing and deductible environment. Overall, underwriting appetite remains highly sensitive to hurricane activity and could shift quickly following a significant event. 
• Southeast (noncoastal): Severe convective storms, including tornadoes and hail, are primary underwriting concerns, as shifting weather patterns continue to drive elevated loss activity across the region. 
• Midwest and Northeast: Severe convective storms resulting in significant wind and hail events, in addition to flooding, and severe winter weather remain key drivers of underwriting decisions and pricing across many markets. 
• West Coast: Wildfire remains the dominant catastrophe exposure despite a less active season than early 2025, while earthquake and tsunami risks also influence underwriting in certain coastal areas. 

Casualty risks are also seeing a significant uptick in competition as standard markets are looking for growth opportunities and are aggressively taking back much of the business that they pulled away from in the hard market. This trend is creating significant competition in the market and causing wholesalers to look for opportunities to compete on more traditional E&S placements and tougher components of these risks. Classes and coverages disproportionately affected by social inflation, litigation trends, and rising claim severity continue to drive demand for specialized Liability solutions, particularly in Excess Liability, where larger limits and complex risk profiles are increasing placement activity. 

Additional trends shaping the Commercial Insurance market include: 

• Strategic capacity deployment: Although capacity has expanded across much of the Commercial marketplace, carriers are seeking out opportunities to access the best business available, leveraging local expertise through strategic partnerships in catastrophic-exposed territories. The sustainability of current Property conditions will depend in part on future catastrophe activity.   
• Specialty solutions expand: Brokers and agents are increasingly turning to products such as Flood, Wind Deductible Buybacks, Environmental Liability, specialty Professional lines, and Sexual Assault & Molestation (SAM) Liability to address evolving client needs and difficult-to-place risks. 
• Submission quality drives results: Complete submissions, accurate Statements of Values (SOVs), replacement cost valuations, currently valued loss data, accurate pricing targets, and detailed underwriting information are helping brokers and agents secure faster quote turnaround times and more competitive underwriting outcomes. 

As market conditions continue to soften, brokers and agents are increasingly revisiting Commercial accounts placed during the hard market. In many cases, broader coverage options, revised deductibles, specialty products, and alternative market solutions may now be available across both Property and Casualty lines. 

Contributor: William Briscoe, Vice President, Alabama & Mississippi, Managing Director, Burns & Wilcox, Birmingham, Alabama 

Professional Liability:

Professional Liability market conditions remain competitive, with rates generally stable to soft across many lines. Market conditions vary by coverage, however, with early signs of firming in select areas, including Large Company D&O and Cyber. Capacity remains strong across most Professional Liability products, although underwriting scrutiny is increasing as carriers evaluate evolving risks. The market is becoming increasingly segmented, with underwriting approaches and pricing varying significantly by industry, jurisdiction, revenue profile, and exposure type. 

Economic uncertainty, litigation trends, social inflation, and rapid advances in technology are reshaping the Professional Liability landscape. Public D&O continues to benefit from abundant capacity and strong competition, while Private D&O, Employment Practices Liability Insurance (EPLI), and certain Cyber risks are receiving greater underwriting scrutiny as carriers respond to changing exposures and loss trends. 

For brokers and agents, this means favorable conditions may remain available for well-managed risks, while placements involving emerging technologies, challenging jurisdictions, or elevated claims activity may require more detailed underwriting support. 

Additional trends shaping the Professional Liability market include: 

• Social engineering becomes a leading Cyber concern: While ransomware remains a significant threat, many organizations have strengthened their cybersecurity defenses through firewalls, endpoint protection, backups, and recovery planning. Underwriters are placing greater emphasis on social engineering risks, including phishing, business email compromise, fraudulent invoices, text message scams, and deepfake audio and video, which target human behavior rather than technology vulnerabilities. 
• AI introduces new liability considerations: AI is creating new exposures across Cyber, Errors & Omissions (E&O), EPLI, and D&O. Carriers are responding with AI endorsements, affirmative coverage solutions, exclusions, and evolving policy language as organizations integrate AI into their operations. Emerging claims include allegations of AI-driven discrimination in hiring and promotion decisions, failures involving AI-supported professional services, compromised AI datasets, and D&O litigation tied to AI disclosures, governance, and overstated capabilities. 
• Specialized Professional Liability solutions remain essential: While many Professional Liability lines benefit from strong capacity and competitive pricing, difficult-to-place risks continue to require specialized solutions. SAM Liability remains particularly challenging due to increasing claim activity and is often addressed in the E&S market, where flexibility in rate and form supports more tailored coverage. 

As these risks continue to evolve, brokers and agents are increasingly focused on understanding how clients are using emerging technologies and reviewing policies for related endorsements, exclusions, and coverage limitations. 

Contributor: Ryan Ascenzo, Senior Broker, Professional Liability, Burns & Wilcox, Brokerage Division, New York, New York

Transportation Insurance:

The Transportation and Garage Insurance marketplace remains challenging as we move into the second half of 2026, though early signs of stabilization are emerging for well-managed risks. Carriers continue to exercise underwriting discipline as loss severity pressures persist. 

Rates remain elevated for fleets with adverse loss history, new ventures, and high-hazard operations. However, competition is increasing for accounts with strong safety controls and favorable loss experience, creating more stable pricing and modest improvements in capacity. Terms and conditions continue to tighten, including higher deductibles, stricter driver qualifications, and increased use of exclusions and sublimits. 

As competition increases, brokers and agents 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. For accounts with strong safety controls and clean loss experience, carriers are showing improved underwriting receptivity and more competitive options. 

Early, complete submissions can further strengthen outcomes. Brokers and agents should clearly document driver screening, safety protocols, regulatory compliance, operational controls, and any improvement in loss trends. Proactive client communication and realistic expectations around terms and pricing remain 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: Burns & Wilcox Transportation Practice Group 

Environmental Insurance:

The Environmental Insurance marketplace enters the third quarter of 2026 in a generally favorable position for wholesale brokers, agents, and their clients. Increased carrier competition, abundant underwriting capacity, and continued market interest in environmental products are helping to offset pressure from rising claim severity and emerging contaminant exposures. 

Environmental Liability pricing remains relatively stable. Contractors Pollution Liability (CPL) business is generally renewing flat to modestly higher, while Site Pollution Liability (PLL) programs are experiencing rate movement ranging from flat to approximately 10%, depending on risk quality, loss history, and exposure profile. Combined environmental programs with Casualty and Professional Liability components continue to see greater upward pressure. 

The most notable market dynamic is the ongoing expansion of carrier appetite. New entrants and established insurers seeking growth continue to compete aggressively for well-managed risks. This competition has created favorable negotiating conditions around pricing, coverage enhancements, and program structure, particularly for real estate, construction, infrastructure, and renewable energy accounts. 

Carriers remain focused on emerging environmental liabilities. PFAS-related contamination, ethylene oxide litigation, mold, legionella, and other pollution-related bodily injury claims continue to drive underwriting scrutiny. Social inflation and increasing plaintiff awards are contributing to higher loss costs, causing carriers to carefully evaluate site history, operational controls, and contractual risk transfer practices. 

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

MARKET PERSPECTIVE FROM A CARRIER LENS:

The E&S market continues to undergo a meaningful change as competitive pressures increase across multiple lines of business. After several years of robust growth, carriers are now facing a markedly different environment. 

Commercial Property remains the most competitive segment of the E&S marketplace. Rate reductions have accelerated throughout 2026 as new and existing capacity competes aggressively for business with little signs of this slowing. 

Pressure is no longer confined to Property. General Liability pricing is also beginning to face increased competition, particularly on well-performing accounts. While underwriting discipline remains generally intact, carriers are reporting growing pressure to reduce rates and broaden terms to retain desirable business. 

At the same time, admitted carriers are increasingly re-entering classes and accounts that migrated to the E&S market during the hard market cycle. As standard markets expand appetite and pricing becomes more competitive, the flow of risks into the E&S channel has slowed. Many accounts that previously required non-admitted solutions are once again finding admitted alternatives. 

Another concern is the growing impact of the significant expansion in managing general agents (MGAs) over the past several years. As competition for premium volume intensifies, questions are beginning to surface regarding underwriting performance across certain delegated authority and fronted program business. In some cases, pressure to sustain growth expectations and operating margins appears to be outweighing a focus on long-term underwriting profitability. As a result, underwriting results within portions of the fronted program market are showing signs of deterioration. 

Distribution dynamics are also evolving. Large retail brokers continue to seek greater control over placement activity, often consolidating wholesale relationships, negotiating higher compensation levels, and in some cases attempting to access E&S markets directly. These trends are creating additional margin pressure throughout the distribution chain and forcing wholesalers and carriers alike to reassess their value proposition. 

As the market moves through the second half of 2026, carriers are increasingly focused on maintaining underwriting discipline amid a softer pricing environment, heightened competition, and changing distribution economics. 

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

LONDON MARKET:

Property

The U.S. Property insurance market continues to face intensifying competitive pressures, particularly in hurricane‑exposed regions. Increased market capacity, improved reinsurance conditions, and a strong appetite for premium growth have driven significant downward pressure on both rates and deductibles across many territories. While Personal lines are leading this softening in pricing and terms ahead of commercial, there is currently no clear indication of stabilization in either segment at this stage of the cycle. 

Despite increasingly competitive pricing conditions, insurers remain acutely aware that underlying catastrophe risk remains elevated. Many London market participants continue to reference “walkaway” pricing thresholds that have yet to be reached, though there is growing consensus that certain territories may approach these levels within the coming months. It will be critical to monitor where the ultimate floor for pricing settles, with ongoing market commentary suggesting that rates are unlikely to return to the lows experienced in the late 2010s. 

Underwriting discipline therefore remains paramount. London carriers are carefully balancing growth ambitions—or flat portfolio strategies—with the need to maintain profitability. Robust risk selection, disciplined exposure management, and a focus on risk features that enhance catastrophe resilience will be essential to navigating this phase of the cycle successfully. Maintaining adequate returns in an environment characterized by declining rates and downward pressure on deductibles will be a key challenge through upcoming renewal periods. 

Rate adequacy continues to be a central theme, both during and following the hard market. Many London syndicates and company markets have openly assessed their adequacy positions at a portfolio level. Combined with the significant volume of data now available across the market, this has enabled greater differentiation and pricing accuracy, particularly for ‘best in class’ risks. As a result, the most desirable business has attracted increased competitive pressure, accelerating a return to more traditional E&S dynamics faster than in previous cycles. 

On a more positive note, insured valuations improved materially during the hard market, with replacement costs more closely aligned to actual rebuild values. This has addressed the significant underinsurance seen prior to 2020, which negatively impacted loss ratios during the previous soft cycle. With improved pricing, more sophisticated modelling, and more accurate valuations, the market enters Q3 with cautious optimism that profitable underwriting can still be achieved despite current conditions. 

The general view within the London market is that, in the absence of one or more major catastrophe events, downward pressure on rates and deductibles is likely to persist into Q4 2026 and potentially into Q1 2027. Feedback from the 7/1 reinsurance renewals has reinforced this outlook. 

Casualty and Professional Liability 

The London market continues to operate within a complex and evolving environment across U.S. Casualty and Professional lines. Capacity remains present across both classes; however, underwriting discipline is firmly embedded, with carriers balancing growth ambitions against ongoing profitability considerations. As the cycle develops, there is increasing differentiation between well-performing risks and those that present more challenging underwriting characteristics. 

London’s role is increasingly focused on supporting complex placements, particularly where domestic U.S. capacity is either constrained or selectively deployed. This is most evident within excess layers, where additional capacity is often required to complete programs and where London’s flexibility and structuring capability remain key differentiators. 

Casualty

The U.S. Casualty market continues to be shaped by elevated claims activity, with both frequency and severity trends influencing underwriting behavior. Litigation dynamics and broader social inflation remain central considerations for London carriers, particularly within general liability and excess casualty business. 

Whilst capacity remains available, it is being deployed more selectively. London markets are increasingly focused on higher layers within casualty towers, reflecting both volatility in loss development and a desire to better manage portfolio exposure. As a result, participation in primary layers is more limited, with excess placements representing the core area of London engagement. 

Pricing across much of the casualty market remains firm, particularly in sectors where historical loss experience or exposure complexity presents additional challenges. While competition exists for high-quality risks, especially those with strong underwriting data and favorable loss records, this has not translated into material softening across the broader market. 

Underwriting discipline continues to strengthen, with carriers placing greater reliance on data quality, risk articulation and demonstrated risk management practices. Submission detail is now a critical factor in securing both capacity and favorable terms, with clear differentiation between best-in-class risks and more marginal exposures. 

London continues to play a key role in supporting capacity-constrained placements, particularly those requiring larger overall limits or involving more complex risk profiles. In this context, the market remains an important complement to domestic US carriers, which continue to dominate primary positions. 

Looking ahead to Q3, these dynamics are expected to persist. Unless there is a material shift in underlying claims trends, the market is likely to remain disciplined, with selective capital deployment and continued focus on maintaining underwriting profitability. 

Professional Liability 

The U.S. Professional Liability market has moved towards a more balanced position following the rate corrections experienced in prior periods. London carriers are generally operating from a stronger pricing foundation, contributing to a more stable, albeit still segmented, underwriting environment. 

Capacity across core Professional lines classes—including D&O, EPLI, and Professional Indemnity—remains stable. London continues to support excess layers and more complex or difficult-to-place risks, with selectivity remaining a consistent feature of underwriting approach. 

Within Cyber, the market has entered a more settled phase following recent volatility. Increased underwriting sophistication and improved risk controls have contributed to greater consistency in pricing and coverage approaches, although larger and more complex risks continue to attract heightened scrutiny. 

SAM remains one of the most challenging areas across both Professional and broader liability classes. Appetite is limited, and underwriting remains highly selective, particularly within sectors such as education, healthcare and social services. Coverage structures are often more restrictive, reflecting both the severity potential and reputational sensitivity of the exposure. 

Medical malpractice and allied healthcare exposures continue to require careful underwriting consideration. While London offers meaningful capacity, particularly within excess layers, the long-tail nature of the class and sensitivity to claims development drive a cautious approach, with an emphasis on governance, controls and loss history. 

More broadly, London’s strength in Professional lines lies in its ability to structure layered placements and provide tailored solutions where domestic capacity is constrained or unavailable. This flexibility remains a key differentiator, particularly for complex or non-standard risks. 

Looking forward, the Q3 outlook is one of relative stability, with competition increasing for well-performing risks while underwriting caution persists in more challenging areas. 

In summary, the London market remains a key strategic partner in supporting U.S. Casualty and Professional Liability business, with its role increasingly focused on excess-layer participation and complex placements. 

Casualty continues to operate under pressure from claims trends, driving a disciplined approach to capacity deployment and maintaining firm underlying market conditions. Professional Liability, while more balanced, remains segmented by risk quality, with certain classes attracting greater underwriting scrutiny than others. 

Across both classes, London’s ability to provide flexible, specialist capacity for complex or difficult-to-place risks remains its core strength. This aligns closely with the Burns & Wilcox Global Solutions model, supporting the delivery of tailored solutions to U.S. wholesale partners in an increasingly competitive environment. 

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 second half of 2026 presents new opportunities for brokers and agents, but success will depend on recognizing that no single trend applies to every risk. While increased competition, abundant capacity, and decelerating Property rates are creating new possibilities across many segments, underwriting discipline remains strong. The industry’s continued flight to quality reinforces the importance of comprehensive submissions, thoughtful risk selection, and experienced wholesale partners. 

As market conditions stabilize across many segments, brokers and agents should revisit coverage decisions made during the hard market, explore broader coverage options, and evaluate whether existing placements continue to meet their clients’ needs. At the same time, emerging risks, including AI, Cyber threats, and changing weather patterns, underscore the importance of staying informed as underwriting priorities evolve. As competition intensifies, comprehensive submissions, accurate valuations, and transparent risk narratives are becoming increasingly important differentiators, helping brokers and agents secure stronger underwriting outcomes and more efficient quote turnaround times. 

An experienced wholesale partner such as Burns & Wilcox helps brokers and agents navigate an increasingly dynamic marketplace. With broad market access, specialized underwriting expertise, global reach, and strong carrier relationships, Burns & Wilcox is prepared to help brokers and agents deliver effective solutions for their clients. 

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.