The Market Turns More Competitive
Based on CIAB Commercial Property/Casualty Market Index, Q1 2026
The commercial P&C insurance market began to soften in Q1 2026 after several years of sustained rate increases. For the first time since Q3 2017, average premiums declined across account sizes, marking a notable shift in overall market conditions.
Increased carrier competition, expanded underwriting capacity, and improved profitability in select lines, especially property, helped drive the shift. Buyers are seeing more favorable pricing, broader appetite, and greater flexibility in some areas. But the market is not moving uniformly. While many lines posted decreases, commercial auto continues to face upward pressure due to ongoing profitability challenges.
This shift gives buyers more leverage in many placements, but results will depend on line of coverage, risk profile, and account size.
A look at the numbers.
The market is softening overall, but results continue to vary significantly by line.
-1.2%
Average premium decrease across all account sizes
-2.7%
Premium decrease for large accounts, the steepest drop among segments
-5.5%
Commercial property premium change, the largest decrease among all lines
+5.8%
Commercial auto premium increase, continuing a 59-quarter streak of increases
-0.3%
Average change across all lines, reflecting broad softening
9 ↓ 6 ↑
Evidence of growing divergence across the market
On the Horizon
Property remains competitive: Expanded capacity and improved loss performance are likely to keep pricing pressure down in the near term.
Auto remains under pressure: Social inflation, litigation, and rising repair and medical costs continue to put upward pressure on commercial auto rates.
Underwriting appetite is improving: Some carriers are showing more flexibility, including on risks that may have faced tighter scrutiny in recent cycles.
Conditions will continue to vary: Expect differences by line to remain, rather than a single market trend across all placements.
For now, many buyers may benefit from more favorable conditions, though some lines will remain challenging.
Persistent Pressure
Despite favorable pricing trends in many areas, several pressures remain:
- Commercial auto remains unstable: Claim frequency, claim severity, and long-term profitability concerns continue to push rates upward.
- Claims costs are still rising: Inflation, litigation trends, and more complex repair costs continue to drive severity.
- The market is less predictable: With some lines easing and others still rising, placement strategy requires more precision.
- Underwriting discipline has not disappeared: Higher-risk segments may still face tighter review, limited appetite, or less flexibility.
The market may be easing overall, but not every buyer or coverage line will experience that the same way.
Yes/And: The M3 Lens
The softening market provides room to recalibrate, yet not all lines are moving in the same direction. Relief in D&O, Cyber, and parts of property create space to strengthen programs; while rising severity in auto and umbrella underscores that risk adequacy matters more than short term pricing trends.
Now is the moment to reassess whether your program reflects today’s realities:
- Leverage decreases in D&O and Cyber. Multiple quarters of improved loss performance and increased capacity signal a favorable window to revisit limits and structure.
- Reevaluate commercial auto strategy. Severity trends and long-running cost pressures point to the need for a coordinated risk approach that integrates safety practices, analytics, and coverage design.
- Align umbrella limits with actual exposure. Auto severity continues to flow into higher layers, making umbrella structure a critical part of overall protection.
Connect with your M3 Client Executive to review the programs you have in place and identify where your coverage aligns with today’s market, as well as where targeted adjustments may help build long-term resilience.
