WTW: Property Rates Decline as Casualty Pressures Persist

Commercial property insurance rates continue to decline as competition among insurers intensifies, while casualty lines face ongoing pressure from litigation costs and claim severity, according to WTW's fall 2026 Insurance Marketplace Realities 2027 report, with the theme of The Specialist View: Navigating Tomorrow's Risk Landscape for 2027. The report examines insurance market conditions and rate expectations across major commercial, professional liability, and specialty insurance lines.

Large and complex property insurance rates declined an average of 14.5 percent in the second quarter of 2026, compared with 8.4 percent a year earlier, according to the report. Shared and layered programs involving five or more insurers experienced average reductions of 23.41 percent, compared with 14.57 percent in the second quarter of 2025. Single-insurer programs recorded average decreases of 8.42 percent, compared with 3.77 percent a year earlier.

WTW said property insurance pricing is moving toward 2019 levels following the reversal of the hard market that extended from 2018 through early 2024. The report projects rate decreases of 5 percent to 15 percent for single-insurer programs and 15 percent to 25 percent for shared and layered placements. Insurers are also demonstrating greater flexibility on coverage terms, deductibles, and policy wording.

Global insured catastrophe losses reached $107 billion in 2025, marking the sixth consecutive year above $100 billion, according to the report. Losses included $40 billion from Los Angeles wildfires and $50 billion from severe convective storms. Insured catastrophe losses totaled $42 billion during the first half of 2026, the lowest first-half total since 2020. WTW identified hurricane activity as a significant factor that could affect property market conditions.

Property reinsurance pricing also declined during 2026, with January 1 catastrophe reinsurance rate-on-line indices falling 12 percent to 15 percent amid abundant capacity, per the report. However, replacement cost inflation accelerated in 2026 because of tariff policies and energy and supply chain pressures, increasing the importance of accurate property valuations.

Casualty insurance presents a different pricing environment, according to WTW. General liability rates are projected to increase 2 percent to 10 percent, while commercial auto liability increases are expected to range from 8 percent to 15 percent for low- and moderate-hazard risks and 10 percent to 20 percent for high-hazard risks. Nuclear verdicts, social inflation, medical costs, and adverse loss trends continue to affect underwriting results.

Umbrella and excess liability rates are also expected to increase, although pricing pressures are moderating, per the report. Umbrella liability increases are projected at 3 percent to 12 percent for low- and moderate-hazard risks and 8 percent to 15 percent for high-hazard risks. Excess liability increases are forecast at 2 percent to 10 percent and 8 percent to 15 percent, respectively. Additional market capacity and competition are contributing to signs of stabilization.

Workers compensation remains the most stable casualty line, according to WTW, with projected rate changes ranging from a 3 percent decrease to a 2 percent increase. The line recorded a 95.3 percent combined ratio and approximately $2.1 billion in underwriting gains in 2025, its 12th consecutive year of underwriting profitability. Claim frequency declined approximately 2 percent, while severity increased 4 percent.

Professional liability insurance markets are generally experiencing stable pricing, although conditions vary by coverage, according to the report. Directors and officers liability rates for public companies are projected to remain flat or increase up to 2 percent for primary coverage and up to 5 percent for excess coverage. Private-company directors and officers liability rates are expected to remain flat or increase up to 5 percent.

Employment practices liability insurance remains competitive, with projected rate changes ranging from flat to increases of 5 percent, according to WTW. However, increasing claim frequency and severity, nuclear verdicts, and evolving employment laws are expected to place additional pressure on rates over the next 12 to 18 months. Insurers are also examining employers' use of artificial intelligence in workplace decisions. Wage-and-hour liability rates are projected to increase 5 percent to 15 percent.

Fiduciary liability insurance rates are expected to remain flat or increase up to 5 percent, according to the report. Competition and available capacity continue to support stable pricing, although insurers are imposing substantial retentions for class-action claims. Litigation involving retirement plan fees and prohibited transactions remains an underwriting consideration.

Lawyers professional liability insurance rates are also stable or declining, per WTW. Large law firms are expected to experience rate changes ranging from flat to decreases of 3 percent, while midsize firms could see decreases of up to 5 percent. Although overall claim frequency has declined, the frequency of catastrophic claims of $50 million or more has increased.

Cyber insurance pricing remains relatively stable, with projected rate changes ranging from decreases of 5 percent to increases of 5 percent, according to the report. Ample capacity and competition continue to benefit buyers, but ransomware, data exfiltration, and artificial intelligence-enabled cyber attacks remain significant exposures. WTW recommends that insureds consider reinvesting premium savings in higher coverage limits and additional risk controls.

The report also identifies artificial intelligence, cloud computing, and expanding data center infrastructure as sources of emerging insurance exposures. According to WTW, the growth of these technologies is increasing demand for specialized coverage and requiring greater coordination across insurance lines to address interconnected risks.