Increased competition is driving the current market softening in property. New entrants, including managing general agents (MGAs) and alternative capital sources, are eager to write business, creating a surplus of capacity that benefits buyers. This competitive environment allows well-managed, lower-risk assets to negotiate renewals at lower premiums.

In contrast, the liability sector (general liability and umbrella/excess coverage) is hardening. Rising litigation risks, third-party lawsuits and large jury verdicts translate to costlier claims. Carriers are responding with rate increases to offset these growing risks, particularly in the multifamily and hospitality spaces.

Underwriting discipline will remain a central theme in 2026. Carriers are scrutinizing risk profiles more closely than ever. Factors such as loss history, risk management practices and exposure to natural catastrophes (CAT) are heavily influencing pricing. Severe convective storms (SCS), including wind and hail events, now rival hurricanes in annual insured losses, prompting carriers to validate valuations aggressively and restrict capacity for CAT-exposed assets.

In this environment, replacement cost inflation also plays a role. Although material and labor costs have stabilized somewhat, they remain elevated compared to pre-2020 levels. Carriers continue to focus on insurance-to-value metrics to help ensure premiums align with potential rebuild costs.