P C REPORT
2026 FORECAST
WHAT’S INSIDE:
Emerging Exposures
Rate, Capacity, and Terms & Conditions
Trends
Forecasts by Line of Business, including Property, Casualty, Commercial, Personal, Professional Liability, Transportation, and Environmental
Reinsurance Market Update
London Market Outlook
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OVERVIEW
P&C 2026 FORECAST
Introduction
Contributor:
Paul G. Smith
Group Senior Vice President H.W. Kaufman Group New York, NY
2026 will be a pivotal year for the Excess and Surplus (E&S) marketplace within Property and Casualty (P&C) following the unique market dynamics of 2025. In short, market cycles are shifting with a softening hard market combined with E&S expansion. This creates both challenges and opportunities for brokers and agents.
The market is characterized by moderate growth, plentiful capacity, and strong underwriting discipline. That discipline is necessary given the continued impact of social inflation, nuclear verdicts, and private equity-funded litigation support for the plaintiff’s bar. The good news is that the industry has adjusted to these challenges with proactive strategies designed to limit their impact.
The E&S market has recorded 14 straight years of premium growth, often with double-digit increases.
The E&S market has recorded 14 straight years of premium growth, often with double-digit increases. It has doubled its share of total P&C premiums compared to a decade ago, according to a September 2025 article on Beinsure Media. Casualty lines now account for more than half of the direct premiums written in the Excess space.
Sector health is further represented by carrier profitability. The relatively tame Atlantic Hurricane season (covered in more detail below) helped, motivating more carriers to enter vertical and geographic markets.
KEY TAKEAWAYS
• The E&S P&C market is in a strong position, supported by disciplined underwriting and strong carrier appetite.
• The E&S marketplace has recorded 14 consecutive years of premium growth, with Casualty lines representing the majority of direct premiums written.
• Social inflation, nuclear verdicts, and litigation funding continue to influence underwriting and pricing decisions, while tort reform in select states is beginning to improve the litigation environment.
• Technological advancements—such as CAT modeling, DIY inspections, and Parametric solutions—are reshaping underwriting and risk management.
• Strong global capacity across Commercial and Personal lines is expanding coverage options and supporting competitive market conditions.
• Emerging risks, particularly those related to A.I., are being addressed through evolving policy language, with the E&S market serving as an incubator for new coverages.
• The 2026 outlook remains constructive, with disciplined underwriting, ample capacity, and continued innovation supporting sustainable growth.
Carriers increasingly releasing reserves
Numerous carriers have reduced the amount of money they set aside for claims as overall claim frequency has declined. As a result, many carriers outperformed initial financial projections for 2025, posting generally positive balance sheets. The use of reserve releases has also emerged as a trend that partially offsets the effects of social inflation and runaway jury awards, which typically drive rates higher. This is a development that many industry leaders, from regulators to rating agencies, will be closely watching.
Regulatory and litigation trends
State legislative activity is shifting how carriers view states. For example, Georgia attracted significant litigation in recent years, rivaling New York, Illinois, and other states where some carriers have reduced their business. Civil litigation filings in Atlanta-area courts rose sharply in 2024 and continued to increase in 2025, with tens of thousands more cases than in prior years, according to Insurance Journal.
However, the Georgia legislature passed some tort reform bills in 2025 that may lessen the number of filings in 2026 and beyond.
Tort reform is having a positive impact in other states as well, including Florida. Nuclear verdicts are falling, and the tort reforms passed in 2022-23 eliminated one-way attorney fees, which barred Assignment of Benefits (AOBs) in new policies, tightened rules for bringing bad-faith claims, and created broader tort-reform measures, according to Insurance Journal.
The Insurance Insider highlighted Florida Insurance Commissioner Mike Yaworsky in December, who indicated that both established, national carriers and newly formed ones are actively pursuing new business in the Sunshine State. These reforms are causing carriers to show more interest in doing business in Florida.
Rates
We are witnessing a period of “measured hardening” in the P&C sector. Pricing discipline is expected to hold in many core lines with less aggressive rate increases, according to Reinsurance News.
Rating agencies such as Fitch also indicate that underlying fundamentals and profitability remain solid. As a result, single-digit increases are likely across many sectors. However, with January 1 reinsurance renewals making headlines, we expect moderate rate reductions across the board.
Capacity
Little has changed over the past year in terms of capacity availability among most P&C verticals. Part of that availability is tied to the broad access that brokers and agents have to global carrier capacity. Most industry experts suggest that the amount of capital willing to write non-admitted/specialty P&C risk globally is higher than at any time in the last decade. Meanwhile, reinsurers are increasingly comfortable backing E&S platforms. We expect available capacity to continue.
Terms & Conditions
Carriers have carefully reviewed the language within their policies in recent years. This language should remain consistent across Property and Liability, particularly given the impact of social inflation, runaway jury awards, and litigation funding. These challenges will require continued underwriting discipline, with little easing expected. Carriers recognize that maintaining this discipline over the long term is essential to preserving the progress made in recent years.
FORECASTS BY LINE OF BUSINESS
During the Burns & Wilcox P&C Eye on 2026 webinar hosted on January 8, 2026, our industry-leading subject matter experts delivered valuable insights into the evolving insurance landscape.
In the following pages, our experts delve deeper into specific sectors within P&C, explore trends, and share outlooks for 2026.
PERSONAL INSURANCE
UNITED STATES
Contributor:
Bill Gatewood Executive Vice President Personal Insurance
Burns & Wilcox
Detroit/Farmington Hills, MI
Click here for contact details >>
Last year began with record-setting wildfires in Southern California that generated more than $50 billion in industry losses, creating early uncertainty. However, the remainder of the year proved more benign with other catastrophic (CAT) events.
U.S. CAT weather-related claims were lower than expected in 2025, particularly in the Southeast. A closer look suggests that luck may have been a contributing factor.
Despite an active Atlantic hurricane season with 13 named storms, only one tropical storm made U.S. landfall, according to the National Oceanic and Atmospheric Administration (NOAA). It was the first time since 2015 that so few named storms reached the U.S. This provided carriers with much-needed relief and allowed many to post profitable results.
Those California fires were the costliest wildfires on record, resulting in an estimated $40 billion in insured losses. U.S. wildfire acreage was below levels seen in some recent peak years and, in many areas, below long-term averages, partly due to varying regional weather patterns and earlyseason conditions across much of the West Coast, according to the California Department of Forestry and Fire Protection.
Large hailstorms were less frequent, and severe flooding was less widespread across the U.S., although some areas still experienced serious conditions. A December 19 article in The Wall Street Journal referenced Swiss Re data that suggests that 2025’s natural-catastrophe insured losses “are still within 5% of the prior 10-year, inflation-adjusted average annual loss.”
Given these and other factors, rate pressure began to ease across parts of the Personal Insurance market, signaling a shift toward increased competition for high-quality risks. This helped improve carrier profitability.
We expect improved availability of “blue-chip” paper in 2026, reducing reliance on unrated or government-backed options. Challenges remain for ultra-high-value homes and high-profile liability risks, but overall conditions are improving in both admitted and E&S markets.
Continued advancements in technology & modeling
Technology is a central consideration for brokers and agents managing their portfolios.
Carriers and wholesalers are using advanced modeling to manage geographic concentration of risk across wildfire, convective storm, flood, and coastal exposures. This helps reduce surprise loss accumulation.
Furthermore, modern catastrophe modeling is reshaping underwriting outcomes. For example, newer homes with strong risk-mitigation features receive more favorable treatment in CAT-exposed areas, which supports long-term pricing stability and profitability.
Parametric – supplement for flood coverage
As flood risk increases and deductibles rise, Parametric Insurance has become an effective tool for managing exposure. Unlike traditional Primary and Excess Flood coverage, Parametric Flood insurance pays out when a predefined trigger—such as measured water levels—is met rather than based on actual loss, providing faster and more certain payment. This approach is commonly used to offset or buy down Flood deductibles.
Burns & Wilcox, the largest provider of Flood solutions in the E&S marketplace, recently launched an exclusive Parametric Flood offering in partnership with Atain Insurance Companies, an “A” rated (Excellent by AM Best) carrier, and Floodbase, a leading AI platform for monitoring and insuring flood risk. The solution is available across multiple sectors, including commercial property, cannabis, transportation, hospitality, and municipalities.
The program delivers highly granular flood analytics for single or multiple locations using satellite data, IoT, artificial intelligence, and historical flood analysis. In addition to Parametric solutions, the Burns & Wilcox Flood Practice Group also offers directto-agent Flood quoting through its IssueQuick digital platform.
COMMERCIAL INSURANCE
Contributor:
Scott Higgins Executive Vice President
Commercial Insurance
Burns & Wilcox
New York, NY Click here for contact details >>
Commercial lines posted slower growth than in prior years as carriers prioritized profitability and early signs of rate softening moderated premium expansion. Social inflation, runaway jury verdicts, and third-party litigation funding continue to influence rate volatility and capacity across markets.
While rates varied by geography—driven by tort reform, weather patterns, demand, and other regional factors—overall pricing showed signs of moderation. An influx of new market entrants increased competition, leading to more aggressive pricing and some market share shifting away from traditional carriers, particularly within the E&S segment.
KEY SEGMENT TRENDS
• Property – Well-controlled, low-hazard risks may experience price declines and modest improvements in terms. CAT-exposed risks remain carefully underwritten, but negotiation opportunities extend beyond pricing alone to structure, limits, and deductibles. Carriers continue to emphasize accurate valuation and risk quality, particularly as inflation and weather volatility influence loss severity.
• General Liability – Overall pricing is stable, though pockets of firmness persist—especially in Construction, Habitational, and other liability-heavy lines, and in specific geographic regions like New York. Litigation environment and loss severity remain central underwriting considerations, influencing terms, exclusions, and attachment points.
• Excess – Pricing remains stable; however, nuclear verdicts and auto-heavy underlying exposures continue to create long-term uncertainty.
• Cannabis – Regulatory complexity and federal illegality continue to push cannabis risks almost entirely into the E&S market. Rates and capacity remain variable, and insureds increasingly rely on specialized carriers and customized coverage structures.
• Hospitality & Habitational – Litigation trends, assault-and-battery exposure, and firearmsrelated risks continue to pressure pricing and coverage terms. Exclusions, sublimits, and elevated deductibles are increasingly common, particularly for large venues and multifamily residential risks.
• Transportation – social inflation, litigation funding, repair costs, and driver shortages will limit rate relief. Capacity is shrinking, making submission quality, data accuracy, and timing critical. See the Transportation update later in the report for additional insights.
At the macro level, social inflation has added an estimated $200 billion in costs to the Commercial Insurance sector over the past 16 years, with little indication of near-term relief. A December 2025 Insurance Insider article noted that litigation funding is only one of several forces contributing to this trend.
Against this backdrop, carrier selectivity remains a defining feature of the market. While some carriers tightened deployment in specific areas last year, overall capacity did not materially contract. Continued growth in the MGA segment has intensified competition while also expanding terms and conditions.
As a result, many clients continue to rely on the E&S market, increasingly seeking customized coverage solutions unavailable in the standard market. This dynamic creates opportunities for brokers and agents to develop more tailored and creative approaches to meeting client needs.
PROFESSIONAL LIABILITY INSURANCE
UNITED STATES
Contributor:
Andy Wood Senior Vice President Professional Liability
Burns & Wilcox
Chicago, IL
Most Professional Liability lines stayed competitive last year, with the notable exception of Sexual Abuse and Molestation (SAM) coverage, which remains one of the most challenging segments of the market. Capacity tightened and program structures continued to evolve, despite earlier expectations for broader market firming. Legislative changes—most notably the removal of statutes of limitation in certain states—are worsening the claims environment and are likely to further constrain capacity.
In addition, long-term care facilities, particularly step-down homes that provide an intermediate level of acute care between hospitalization and traditional nursing homes, continue to face limited appetite due to elevated claim frequency and litigation pressure from social inflation and attorneydriven claims.
Outside of these challenged areas, the broader Professional Liability market remained soft, supported by Excess capacity across most lines.
• Errors & Omissions (E&O) continues to benefit from strong competition, limiting pricing movement despite evolving loss trends.
• Directors and Officers (D&O) remains very soft; however, growing profitability concerns are emerging, driven by increased claims activity and loss severity. While pricing has continued to decline, underwriters are increasingly focused on risk selection and long-term performance.
• Cyber pricing continues to remain competitive as capacity remains ample; however, rising claims frequency and severity are beginning to influence underwriting behavior and will alter the overall pricing trajectory.
These competitive dynamics were reflected in rate performance across Professional Liability lines, which varied by coverage type. Cyber rates declined approximately 2.6%; D&O fell about 2.1%; and Employment Practices Liability (EPLI) remained soft with isolated pockets of firming. Miscellaneous Professional and Allied Health lines were largely flat and competitive.
Looking ahead, Cyber is the Professional Liability line most likely to see rate increases in 2026. Rising loss frequency and severity—particularly from systemic events—combined with longer claim tails are creating gradual upward pricing pressure.
Cyber is the Professional Liability line most likely to see rate increases in 2026.
An influx of new carriers and MGAs expanded capacity across Professional Liability lines, reinforcing competition and limiting broad-based rate increases for 2026 renewals. However, emerging profitability pressures—most notably rising severity, longer development tails, and increased frequency in Cyber—are expected to drive tighter underwriting discipline and greater pricing scrutiny going forward.
A.I. SPOTLIGHT
A.I. is becoming a growing focus across the insurance industry as new exposures emerge that are not clearly addressed by traditional policy language. While A.I.-related risks are generally not affirmatively included under most standard policies, the market is still assessing how these exposures fit within existing coverage frameworks.
Standalone A.I. coverage is unlikely in the near term, with A.I. exposures more likely to be addressed through definitions, endorsements, clarifications, or sub-limits within existing policies.
This topic is expected to remain prevalent for the P&C sector, as A.I.-driven errors and unintended consequences can be costly for organizations. Burns & Wilcox recently profiled the adverse financial impact on Deloitte resulting from A.I.influenced errors contained in a report created for the Australian government.
Two general carrier approaches are emerging: some carriers are exploring more affirmative A.I. language or coverage considerations, while others are relying on existing policy language and limits as they monitor exposure and claims activity.
The bottom line is that the A.I. space will continue to evolve, and the E&S market is expected to play a role in helping establish insurance options. Separating A.I. exposure from broader Professional and Management Liability products will take time, with careful policy language scrutiny remaining critical as the market develops.
TRANSPORTATION INSURANCE
UNITED STATES
Contributor:
Gene’ Cain Broker Transportation Burns & Wilcox, Brokerage Division Atlanta, GA
Click here for contact details >>
The Commercial Auto and Garage Insurance marketplace remains challenging as we enter 2026. Combined loss ratios continue above 100%, and underwriting discipline is expected to persist. Rate increases have now stretched across 55 consecutive quarters, with carriers maintaining firm pricing and a selective approach to risk.
• Loss severity is rising due to inflation, nuclear verdicts, repair costs, supply-chain delays, and growing exposures from electric vehicles (EVs).
• Regulatory enforcement of English-language proficiency for drivers intensified in 2025, worsening driver shortages and increasing scrutiny of B1 and Mexico-licensed drivers.
• Garage Insurance opportunities are expanding, especially for mobile mechanics, heavy truck repair, and non-franchised dealers.
• Capacity is available but selective. Complete submissions, strong safety culture, and telematics can improve pricing and options.
Carriers are emphasizing proactive loss mitigation—telematics, cameras, documented hiring and training standards, and regular maintenance protocols are increasingly rewarded. Brokers and agents should educate clients on regulatory changes, review coverage regularly, and highlight unique operational details to secure competitive terms.
Partnering with Burns & Wilcox and leveraging our expertise and broad market access remains essential for navigating complex risks and adapting to evolving market conditions.
TIP FOR BROKERS
Carriers are emphasizing proactive loss mitigation—telematics, cameras, documented hiring and training standards, and regular maintenance protocols are increasingly rewarded.
ENVIRONMENTAL INSURANCE
UNITED STATES
Contributor: Beth Linton Vice President
Environmental
Brokerage
Burns
& Wilcox, Brokerage Division
Atlanta, GA
Click here for contact details >>
The Environmental Insurance marketplace enters 2026 with a cautiously optimistic outlook, shaped by regulatory pressures, emerging contaminants, and evolving risk management strategies. After several years of volatility, premium rates are stabilizing, with most lines experiencing modest increases. Contractors Pollution Liability (CPL) is expected to remain largely flat, with slight upward adjustments of up to 5%, while Site Pollution Liability (PLL/EIL) may see increases in the range of 0% to 10%. Combined programs that integrate Environmental coverage with Casualty, Professional, or Excess layers are projected to rise between 5% and 10%. These trends reflect a competitive marketplace where new carriers and expanded carrier appetite are cooling rate escalation despite rising claim costs.
Capacity remains a critical theme in 2026. While the influx of new carriers and innovative products has eased pressure on primary layers, excess capacity continues to tighten, particularly in highrisk exposures such as Environmental Auto Liability in certain regions. This has led to reductions in available limits and, in some cases, non-renewals. Brokers and insureds are increasingly turning to layered programs across multiple carriers to manage pricing and maintain comprehensive coverage.
From a growth perspective, the Environmental Insurance market is on a strong upward trajectory. Global estimates suggest the sector could approach $979.7 billion in 2026. The green insurance niche—covering eco-friendly and sustainability-focused products—is expected to grow even faster, fueled by Environmental, Social, and Governance (ESG) mandates and consumer demand for environmentally responsible solutions.
Several factors are contributing to this growth. Regulatory tightening and enforcement of environmental standards remain primary drivers, alongside heightened ESG transparency requirements and investor pressure for sustainable practices.
In summary, 2026 marks a period of steady growth and transformation for Environmental Insurance. While premium increases are moderate, the market is characterized by expanding capacity, innovative product development, and heightened attention to emerging contaminants.
“ “
2026
marks a period of steady growth and transformation for Environmental Insurance.
For agents, brokers, carriers, and insureds alike, success will hinge on partnering with knowledgeable Environmental Insurance professionals, proactive risk management and strategic layering of coverage. The long-term outlook is robust, with Environmental Insurance positioned as a critical component of global risk management strategies in an era of increasing environmental accountability.
REINSURANCE MARKET UPDATE
UNITED STATES
Contributor:
Chris Zoidis President and CEO
Atain Insurance Companies
Farmington Hills, MI
Property reinsurance pricing softened more than expected during the January 1 renewal cycle. U.S. property CAT excess-ofloss rates declined 12–15%, exceeding initial market expectations. This can be attributed to abundant capacity and oversubscribed placements.
Several years of relatively limited CAT losses have resulted in strong returns and continued flow of capital into the property reinsurance market. As a result, further softening is emerging in E&S property pricing, and we expect continued rate decreases in 2026.
A positive for property reinsurers, insurer retentions generally held stable in this renewal cycle, which is notable given that insurer retentions had been pushed up significantly over the past few renewal cycles.
Casualty reinsurance remained stable but segmented. Unlike property, which experienced meaningful softening, casualty pricing largely held firm. Outcomes varied by account composition and quality, with well-performing portfolios achieving improved terms, while auto-heavy or distressed General Liability exposures continued to face pressure.
Unlike property, which experienced meaningful softening, casualty pricing largely held firm .
We did see increased reinsurance capacity in the January reinsurance renewals, driving some casualty placements to be oversubscribed. Well-performing accounts did achieve moderate rate decreases and increased ceding commissions in some cases. Despite the increased capacity, reinsurers still express underlying concerns with the US casualty market, so broad-based softening across the market appears unlikely.
Atain is an “A” rated (Excellent by AM Best) property and casualty insurance company that offers a broad range of property, casualty, professional liability and personal insurance products in the excess & surplus market.
Learn more
PERSONAL INSURANCE CANADA
Contributor:
Michelle Allemang Manager, British Columbia
National
Product Leader
Personal
Insurance
Burns & Wilcox
Vancouver, BC
Click here for contact details >>
As we enter 2026, the Canadian Residential Property Insurance market is expected to carry forward many of the trends seen at the end of 2025, with early signs of stabilization and selective tightening emerging—particularly for CAT-exposed risks. Capacity remains available across both standard and specialty segments, though insurers are increasingly focused on profitability, data quality, and long-term sustainability.
CAT activity, especially wildfires, continues to shape underwriting strategy. While overall losses in 2025 trended lower than initially projected, recent and ongoing wildfire events—including those in Atlantic Canada—underscore the persistent volatility of the Canadian CAT landscape. Loss development is still being evaluated and may influence localized pricing and terms as carriers reassess aggregate exposure.
The market has benefited from improved risk mitigation and underwriting discipline. Many CAT events occurred in less densely populated or lowervalue areas, and where losses did arise, higher deductibles, coverage restrictions, and strengthened mitigation requirements—such as defensible space initiatives and fire-resistant construction—helped protect insurer results. These measures are expected to remain a cornerstone of underwriting in 2026.
Competition remains active in low- and moderaterisk regions, where pricing is largely flat and capacity continues to expand. However, in higher-risk or historically loss-affected zones, the pace of softening is slowing. Insurers are applying greater scrutiny to location, construction, prior losses, and mitigation efforts. As a result, the market is increasingly bifurcated—stable conditions for preferred risks, alongside modest rate firming or tightened terms for more complex exposures.
Standard insurers continue to underwrite selectively. While non-renewal activity has eased, challenges persist for properties with prior losses, high insured values, custom construction, multiple lenders, or nontraditional occupancies such as short-term rentals or home-based businesses. Inflation and rising reconstruction costs remain key pressure points impacting affordability and capacity.
Brokers and clients continue to rely on specialty markets for flexible solutions as standard market guidelines tighten in higher-risk segments.
Looking ahead to 2026, we expect:
• Generally flat pricing and stable capacity in low- and moderate-risk areas.
• Selective rate firming for hard-to-place risks.
• Increased emphasis on data, mitigation, and risk selection.
• Continued reliance on specialty markets for complex Personal risks.
In response, Burns & Wilcox continues to expand its Personal Insurance offerings, including the recent launch of a second specialty Homeowners’ product. With multiple specialty solutions now available, Burns & Wilcox is well positioned to support brokers navigating a more disciplined Personal lines market in 2026.
COMMERCIAL INSURANCE
CANADA
Contributors:
Patricia Sheridan Managing Director Burns & Wilcox
Toronto,
ON
Click here for contact details >>
Steven Hrab Director, Construction
Burns
& Wilcox
Toronto, ON
Click here for contact details >>
As we move into 2026, the Commercial Insurance market is expected to remain competitive, with continued soft—though hopefully stable— conditions.
The Commercial Insurance market is expected to remain competitive , with continued soft—though hopefully stable —conditions.
After a full cycle of the soft market in Canada, we anticipate improved renewal retention and rate levels that remain largely flat.
Our focus remains on delivering flexible solutions for complex and hard-to-place Property and Liability risks, supported by expanded capacity and targeted product offerings.
Key highlights include:
• Property capacity of up to $15 million.
• Commercial realty risks (including vacant and mixed occupancies).
• Student and rooming houses.
• Hospitality operations.
• A broad range of contractor classes.
Burns & Wilcox will continue to differentiate through responsive service, disciplined underwriting, ongoing product development, and strong partnerships with our retail brokers and markets.
Construction
The Construction Insurance market has remained soft in recent years, driven by increased competition from new MGAs and highly competitive pricing. As we enter the new year, rates are beginning to stabilize, supporting a more balanced and sustainable market.
Concerns around tariffs, inflation, and supply chain disruptions continue to affect material costs and project timelines, and these factors remain key considerations in evolving Construction risks and insurance needs.
Burns & Wilcox remains a trusted partner for Construction risks of all sizes, supported by a strong product portfolio and a commitment to service excellence.
Ongoing enhancements to the Builder’s Risk program continue to deliver added value and flexibility for brokers and their clients.
PROFESSIONAL LIABILITY INSURANCE CANADA
Contributor:
Danion Beckford Senior Underwriter Professional Liability
Burns
& Wilcox
Toronto, ON
The Professional Liability space remains to be highly competitive both with our domestic and London partnerships due to the soft market. Burns & Wilcox has made a concerted effort to expand our offerings to provide our clients with the best-in-class coverages to support their specific insurance needs.
Demand for customized solutions in Architects & Engineers (A&E), Miscellaneous Errors & Omissions (E&O) and Cyber will remain our focus this year. To meet these needs, we have strengthened partnerships with both established and new markets, allowing us to deliver more innovative and competitive solutions tailored to the unique risks professionals face. Our partnerships have provided us with the expansion of our in-house underwriting capabilities to service our clients faster and more efficiently.
We have strengthened partnerships with both established and new markets, allowing us to deliver more innovative and competitive solutions.
Additionally, our expanding appetite in the health and wellness space has allowed us to gain momentum with this line of coverage.
Our commitment to delivering exceptional coverage remains unchanged, supported by both existing relationships and newly formed market alliances that allow us to maintain competitive pricing in today’s environment.
TRANSPORTATION INSURANCE
Contributor: Fernando Batista Manager Transportation Burns & Wilcox Toronto, ON
Click here for contact details >>
The Transportation sector heads into 2026 with a cautious outlook. Freight volumes have steadied but not surged, and most carriers are still prioritizing margin protection over aggressive growth. Equipment costs, labor shortages, and financing pressure have not disappeared, so operators continue to run lean fleets and focus on profitable lanes rather than pure expansion.
From an insurance standpoint, the prolonged softening of the market has kept pricing highly competitive. Capacity remains plentiful, and many insurers are willing to stretch on terms to hold onto market share. That dynamic is great for buyers in the short term, but it also creates pressure on underwriting discipline, especially as loss frequency tied to nuclear-verdict territory and social inflation has not meaningfully improved. Risk selection and clean data remain differentiators for carriers looking to secure the best deals.
Cross-border operators are now managing another variable: tariffs. Added friction at the border, extra documentation, potential cost pass-through, and uncertainty in trade flows have made long-haul routes harder to price and predict. Insurance providers will be watching whether volatility drives changes in fleet mix, routing decisions, and cargo values.
Risk selection and clean data remain differentiators for carriers looking to secure the best deals.
As 2026 unfolds, stability will depend less on headline rates and more on how well companies adapt to changing cost inputs and a competitive underwriting landscape.
Selecting the right partner is more crucial than ever to help you navigate through the turbulence. Our Transportation solutions at Burns & Wilcox Canada can help you close those gaps.
ENVIRONMENTAL INSURANCE
CANADA
Contributor: Karim Jaroudi Manager Environmental Burns & Wilcox Toronto,
ON
The Canadian Environmental Impairment Liability (EIL) market is expected to remain soft entering 2026, with competitive conditions persisting across most segments. Continued participation from newer MGAs in the environmental space is sustaining downward pressure on pricing. At the same time, ongoing industry consolidation—driven by mergers, acquisitions, and pockets of financial strain—continues to influence contractor risks and, to a lesser extent, select premises exposures such as manufacturing and industrial operations.
Renewal activity is likely to remain price-sensitive; however, established broker–underwriter relationships should continue to support strong retention outcomes. While premium levels remain compressed, there is measured optimism for new business opportunities, particularly for well-managed risks supported by clear, well-documented underwriting narratives.
No significant shifts in overall market behavior are anticipated in the near term. Underwriting discipline remains intact, though there is a gradual expansion of available capacity and increased willingness to consider broader risk profiles. This cautious growth reflects a collaborative approach to placing business amid ongoing competitive and economic pressures.
The traditional late-year surge in 2025 began earlier than usual and is expected to extend into the early part of 2026. Rate compression is expected to persist, but responsive pricing strategies and disciplined underwriting should continue to support market stability and consistent placement outcomes.
MARKET UPDATE
LONDON
Property
Kerry Hall Head of Burns & Wilcox Lloyd’s Products Burns & Wilcox Global Solutions London, UK Contributors:
Declan Durkan Managing Director, Non-Marine Burns & Wilcox Global Solutions London, UK
The 2025 Property market was a year of transition. Key developments include softening rates and strategic shifts within the London market. With the 1/1 reinsurance negotiations for 2026 underway, U.S. Property Cat buyers are expected to benefit from further increased rate flexibility, with rate reductions projected at 15-20% for the forthcoming year. Stamp capacity growth has slowed for many major syndicates, signaling more caution as we enter the new year.
Meanwhile, investment in technology continues to be a significant focus, and within the London market a rise of cross-class facilitation remains a central theme. Lloyd’s CEO Patrick Tiernan reported 50% growth in cross-class facilities, highlighting a trend toward streamlined placement and efficiency.
Last year began with significant wildfire losses in California, estimated at $40–50bn, followed by an extremely benign U.S. storm season with no major hurricanes making landfall. This favorable catastrophe environment has accelerated rate reductions throughout the second half of the year and is expected to continue into 2026. Coastal states are experiencing the greatest pressure on rating, driven by both local and London markets competing aggressively for business.
Looking ahead, while market conditions suggest continued softening, success will depend on disciplined underwriting and strong strategic partnerships. Technology-driven efficiencies and innovative facility structures will play an increasingly important role in sustaining growth and profitability. Maintaining underwriting rigor and adapting to evolving market dynamics will be critical as we navigate the challenges and opportunities of 2026.
Casualty
Q4 2025 signaled a shift toward a softer phase. Lloyd’s warned that Casualty price adequacy is “probably insufficient,” even as Property rates fell and Cyber growth ambitions accelerated; management emphasized maintaining long - term return hurdles amid narrowing margins and a more competitive distribution landscape (facilities, structured solutions). Independent commentary echoed this, noting that rate alone cannot be relied upon—discipline around terms, attachment points, and portfolio selection is central as follow- market models face pressure from facilitation and broker structures. At a macro level, AM Best revised its London Market outlook to stable, citing signs of softening and persistent social inflation risk, albeit supported by higher investment yields and ongoing demand from U.S. E&S lines.
Casualty pricing/placement in London
By late - 2025, Primary Casualty was broadly competitive, with General Liability (GL) increases moderating and Workers’ Compensation typically flat, while Auto Liability remained elevated due to claims severity and repair complexity (including EV battery issues).
Excess/umbrella towers showed continued diligence—lower layers and loss - affected accounts seeing high single to low double - digit moves, but with stabilization compared to the 2023–2024 peaks; carriers remained wary of auto exposure and attachment points. Overall, capacity was available, yet it often required more markets to complete limits, and incumbents increasingly traded margin to retain positions on clean accounts.
Bermuda Casualty
Bermuda entered Q4 with firmer pricing, but signs of moderation: low- hazard risks achieved flat to +6%, while high - hazard or loss - affected exposures remained +5% to +20%, supported by disciplined underwriting and selective capacity growth.
Indications point to appeals tempering nuclear verdicts and to an expected “Class of 2026” of new carriers, which could broaden appetite at various attachment levels and occupancies.
Spring 2025 updates had already highlighted litigation inflation and constrained capacity as persistent drivers for casualty—conditions that have eased only on cleaner accounts.
Capital & renewal dynamics into 2026
Balance sheets remained strong: Bermuda (re) insurers posted robust returns despite a higher combined ratio (~90% for 2024) and rising catastrophe loss contributions; market pricing passed its peak, but underwriting discipline and alternative capital (ILS) underpin resilience. January 2026 renewals suggest an orderly market with moderating Property- CAT rates and largely intact terms; third - party capital rose and sidecars extended beyond property—supporting flexible capacity deployment across specialty and, selectively, Casualty. For London, Lloyd’s projects 2026 growth with a 91.2% target net combined ratio but reiterates that sustainable profitability hinges on careful monitoring of price adequacy and the evolving battle for distribution facilities and structured solutions.
Lloyd’s projects 2026 growth with a 91.2% target net combined ratio.
Trends heading into 2026
Expect continued rate moderation and broader capacity for clean Casualty risks, counterbalanced by pressure on auto - related segments and higher- hazard classes (Construction, Habitational) where severity persists. As mentioned in last quarter update, structured solutions and multi -year deals will expand for preferred risks (especially in Bermuda), while London will see facility- led placements grow, challenging pure follow models and rewarding underwriters and brokers who articulate differentiated value. Social inflation and litigation funding remain watch - items; however, appeals dampening nuclear verdicts, and new entrants suggest a more stable— but still disciplined—Casualty landscape.
CONCLUSION
P&C 2026 FORECAST
Contributor:
Paul G. Smith Group Senior Vice President
H.W. Kaufman Group
New York, NY
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The E&S marketplace remains resilient following the unusual conditions of 2025, extending its streak of premium growth to 14 consecutive years. Casualty lines now account for the majority of E&S premiums.
Despite pressure from social inflation, nuclear verdicts, and litigation funding, carriers have preserved profitability through disciplined underwriting, reserve management, and favorable tort reforms in states such as Florida and Georgia.
Technology and innovation are increasingly central to underwriting and risk management strategies. Advances in catastrophe modeling, alternative inspection methods, Parametric solutions, and clearer policy language for emerging risks—such as artificial intelligence—are helping carriers manage volatility.
At the same time, ample capacity and moderate rate softening across Commercial and Personal lines are improving market access and coverage quality.
Ample capacity and moderate rate softening are improving market access and coverage quality.
Looking ahead to 2026, the outlook is cautiously optimistic, with expectations for continued expansion, competitive but sustainable pricing, and a more predictable operating environment.
While challenges persist, the E&S sector’s adaptability, regulatory improvements, and technological integration position brokers, agents, and carriers for steady growth and effective responses to evolving client needs.
The outlook is cautiously optimistic , with expectations for continued expansion, competitive but sustainable pricing, and a more predictable operating environment.
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.
