How brokers and clients can stay
ahead in the 2026 property and casualty market
By Justin Foa
The property and casualty (P&C) insurance market began to show signs of settling down in the first half of 2025, but that doesn’t mean brokers and their clients can afford to take their foot off the gas. While rates are starting to moderate and capacity is loosening in some areas, there are pockets of hardening, even in sectors that are softening overall.
If you’re not paying close attention to the trends shaping this next phase of the market, you’re likely to miss key opportunities—or worse, get caught off guard.
At Alera Group, we’ve been living in this data all year. And while the headlines tell part of the story, what’s happening behind the scenes is where brokers and their clients really need to focus. Here’s what’s unfolding now, what’s changing, and what you need to do to stay ahead into 2026.
Market signals: A softer landing, but friction remains
The outlook for the rest of this year paints a picture of a market that’s stabilizing but not necessarily becoming easy. Let’s start with some facts:
- Commercial property rates are currently projected to moderate and even decrease for the best risks as additional capacity comes online.
- Commercial auto and umbrella/excess liability rates continue to trend up, driven by an increasingly sophisticated plaintiffs’ bar and tariffs possibly driving up vehicle replacement costs. But additional capacity in some areas have blunted those increases.
- Personal lines remain under pressure, with wildfire being top of mind after the catastrophic LA fires at the start of 2025.
You’ll notice we didn’t highlight any percentage rate changes because they don’t mean much in this market. A knowledgeable broker understands where a risk falls in relation to the broader market and what constitutes a good rate.
Risk quality—mixed with market rates and insurer appetite—will determine how a client’s rates will change. This aspect of insurance brokerage is more of an art than science. Let’s look at a few general examples:
- A property risk with a significantly under market rate might still experience an increase.
- A liability risk that had difficulty getting capacity last year may benefit greatly from increased capacity.
- A cyber policy may decrease significantly because of better security and controls spurred on by a large premium increase the year before.
According to Alera Group’s 2025 Property and Casualty Market Outlook, underwriters are still applying tight scrutiny, particularly for lines like commercial auto, commercial property, and umbrella/excess liability. If you think underwriters are back to the days of cutting deals quickly, think again.
So, what does this mean for brokers and their clients? Even in lines where rates are stabilizing, clients still need to be ready to present complete, well-documented submissions that tell a clear, honest story about their risk.
The data shift: It’s not optional anymore
One of the biggest forces reshaping the market is how heavily insurers are leaning into data and artificial intelligence (AI) to make decisions. This isn’t some future trend; it’s reshaping underwriting right now, and it’s changing how brokers and clients need to approach renewals.
Insurers are using AI to automate underwriting, deliver real-time pricing, and even predict risks with greater precision. For brokers, this creates both a challenge and an opportunity.
Here’s the challenge:
- Expect more data requests. Carriers are asking for deeper, more granular information, which is more than most clients are used to providing.
- Expect faster, less-forgiving underwriting cycles. AI-powered underwriting doesn’t leave as much room for negotiation or incomplete applications.
But there’s also opportunity: If your client’s risk data is clean, digitized and well-presented, they will stand out—in a good way. The likely outcome will be more favorable terms and smoother renewals.
That said, AI isn’t a perfect solution. Many of the current underwriting models lack transparency. Sometimes the algorithm flags a risk without a clear explanation. That’s why a strong broker-client partnership still matters. The broker’s job is to help tell the full story beyond what the numbers alone may suggest.
Watch these risks: What’s heating up for 2026
Beyond the pricing environment, brokers and clients need to stay sharp on three emerging risks that have already gained momentum in 2025 and will likely intensify in 2026.
- PFAS (Forever Chemicals)—A major liability to watch. PFAS exposures aren’t new, but they’re rapidly becoming one of the biggest ticking clocks in the insurance world. According to Moody’s, PFAS could grow into an $80 billion issue for insurers and insureds, with total expenses possibly exceeding $200 billion.
Here’s what brokers and clients should be thinking about right now:
- Are PFAS a potential risk in your operations, products or supply chain?
- Are you taking proactive steps to assess and manage that exposure?
- Are you reviewing contractual language carefully, especially in vendor agreements?
One of the biggest forces reshaping the market is how heavily insurers
are leaning into data and artificial intelligence (AI) to make decisions. This
isn’t some future trend; it’s reshaping underwriting right now, and i
t’s changing how brokers and clients need to approach renewals.
This is a conversation brokers should be leading with their clients. The time to prepare is now, before this risk dominates the headlines.
- Climate-driven losses: The frequency problem. Extreme weather isn’t just a Gulf Coast or California problem anymore. In 2024, global insured losses from natural catastrophes topped $100 billion for the sixth year in a row, even though no single event caused more than $10 billion in losses.
And it’s not just the size of these events; it’s the spread. Smaller, costlier climate events are hitting businesses in regions that weren’t historically considered high-risk. Brokers need to guide clients to:
- Develop disaster response and continuity plans, even if they’re not in known catastrophe zones.
- Understand that underwriters are using better satellite imaging and weather modeling now, so exposures that were overlooked in the past are very much on the radar today.
- Consider alternative risk financing, especially in catastrophe-exposed areas where traditional insurance is becoming harder to find or afford.
- Social inflation and litigation funding: The claims are getting bigger. Social inflation—claims that grow beyond what the economy can explain—isn’t letting up. What’s driving it?
- Juries are becoming desensitized to massive awards.
- Public sentiment continues to skew against large corporations.
- Litigation funding has exploded into a $15 billion industry.
Insurers estimate social inflation has added roughly seven percentage points to liability claims growth in the past year alone. This means clients can expect higher liability rates and tighter underwriting in lines like general liability and umbrella/excess.
Three ways brokers and clients can get ready for 2026
The clients who win in this market will be the ones who plan ahead and treat their insurance broker like a true strategic partner.
- Know your risk appetite and revisit it. Markets shift. Businesses evolve. The first half of 2025 has proven that risk appetites need to evolve, too. Brokers should encourage clients to think carefully about:
- Which risks they’re comfortable retaining (via higher deductibles, for example).
- Which areas they absolutely need to transfer to insurers.
This kind of clarity helps you build a smart program and negotiate with underwriters more effectively.
- Don’t rush the submission. This might sound basic, but a well thought out strategy on how to best present a client’s risk profile can really pay off. Start early, decide which information will help underwriters feel comfortable with your risk and present it in a clear concise manner. Remember:
- Underwriters are swamped. Last-minute submissions don’t get priority—and they often don’t get the best terms.
- Quality beats speed. The more complete, polished, and detailed the submission, the better the chance of securing favorable pricing.
Start early. Gather loss history. Document risk management practices. If there have been prior losses, explain them—up front, clearly and with proof of corrective actions.
- Build relationships with underwriters. Data may be driving decisions, but relationships still matter. When possible, brokers should facilitate direct connections between clients and key underwriters—whether virtually or in person.
A submission tells your story. But a conversation brings it to life. Underwriters who understand the people behind the business—who can see leadership’s commitment to managing risk—are more likely to advocate for that account.
The bottom line
The 2025 P&C market may be stabilizing, but it’s still a selective and competitive landscape. Insurers are getting smarter, faster and more data-driven. Brokers and clients who lean in, stay proactive and build strong, transparent partnerships will be best positioned to succeed through the rest of 2025 and into 2026.
If you’re waiting for the “old market” to come back—it won’t. But for those who get ahead of the curve now, this next phase offers plenty of opportunity.
The author
Justin Foa is leader of Alera Group’s Property and Casualty (P&C) practice. He is responsible for unifying the practice’s nationwide strategy, ensuring consistency in service delivery while equipping both the sales and service teams with the tools needed to address complex client challenges. Justin has more than 30 years of insurance industry experience, including more than 10 years with multinational brokerage firms before he joined his family’s firm, Foa & Son, and becoming its president in 2006. He is a graduate of the Wharton School of Business at the University of Pennsylvania, where he earned his bachelor’s degree in insurance and risk management.
The author
Justin Foa is leader of Alera Group’s Property and Casualty (P&C) practice. He is responsible for unifying the practice’s nationwide strategy, ensuring consistency in service delivery while equipping both the sales and service teams with the tools needed to address complex client challenges. Justin has more than 30 years of insurance industry experience, including more than 10 years with multinational brokerage firms before he joined his family’s firm, Foa & Son, and becoming its president in 2006. He is a graduate of the Wharton School of Business at the University of Pennsylvania, where he earned his bachelor’s degree in insurance and risk management.
