P&C Report: 2026 Q2 Outlook

INTRODUCTION

The Property & Casualty (P&C) market enters Q2 2026 in a period of stabilization, with softening conditions and increasing competition across the market. While rates are moderating, underwriting discipline remains in place, and carriers continue to prioritize risk quality and well-structured submissions. 

On the Property side, conditions are competitive but not aggressively soft. Strong industry performance underscores this environment, with the U.S. insurance sector reporting an estimated $63 billion underwriting gain in 2025—more than double the $23 billion recorded in 2024, according to Verisk. A relatively mild catastrophe (CAT) environment over the past two years—particularly across the Atlantic hurricane seasons—has contributed to increased carrier participation and greater flexibility in certain areas. However, the market remains sensitive to CAT activity, beyond just hurricanes, including severe convective storms, temperature extremes, and wildfires that can result in a single significant event quickly influencing pricing and capacity. 

Casualty presents a more complex picture. While pricing is generally stable, underlying pressures persist. Social inflation, litigation trends, and rising loss severity continue to influence underwriting decisions, particularly in higher-risk sectors such as Habitational, Transportation, and Liquor Liability. Carriers remain focused on maintaining discipline, even as competition increases. 

At a broader level, the current environment reflects a more competitive marketplace, with carriers re-entering select segments and expanding appetite in targeted areas. This has led to more aggressive pricing and, in some cases, broader coverage offerings. However, underwriting remains selective, and outcomes depend heavily on submission quality, risk presentation, and broker engagement. 

Several additional trends are shaping the market: 

Technology Driving Faster Execution 

Artificial intelligence and API-driven platforms are improving speed to market, particularly within the binding authority space where rapid turnaround time is critical. These tools are also enhancing underwriting precision and market selection, improving data quality, and driving greater efficiency across the industry. In a recent interview with The Insurer, Burns & Wilcox President Danny Kaufman highlighted how teams are deploying AI tools to deliver faster, more informed client outcomes, while H.W. Kaufman Group CIO Rich Fusinski detailed in Insurance Business America how investments in automation, data exchange, and AI are modernizing our specialty insurance operations. 

Carrier Re-Entry and E&S Strength 

Admitted carriers are beginning to re-enter certain segments, though activity remains targeted rather than widespread. Structural limitations around rate and form flexibility continue to position the Excess & Surplus (E&S) market as a key solution for complex and non-standard risks. 

At the same time, the E&S market continues to expand, supported by strong capacity and increasing demand for flexible, customized coverage solutions enabled by freedom of rate and form. 

Diverging Carrier Strategies 

Carriers with higher premium volume remain hyper-focused on profitability and underwriting discipline, avoiding a “race to the bottom” for underpriced risks. In contrast, many mid-sized carriers and MGAs are pursuing topline growth opportunities, particularly in smaller and underserved segments. This dynamic is increasing competition while maintaining a disciplined underwriting environment. 

Expanding Parametric Solutions 

Parametric solutions are gaining traction as a flexible tool for managing catastrophe-related exposures. Unlike traditional coverage, parametric policies trigger payouts based on predefined metrics—such as rainfall levels or flood depth—rather than actual loss, enabling faster claims resolution and improved liquidity following an event. 

Growth in Global Solutions 

Demand is rising for solutions that address complex, high-value, and multinational risks. Access to global markets, including Lloyd’s and the broader London marketplace, is providing additional capacity and flexibility—particularly for risks that fall outside traditional underwriting models.  

Burns & Wilcox is delivering on this demand by leveraging Burns & Wilcox Global Solutions to provide clients with seamless access to international markets and coordinated cross-border placements. This includes growth in specialty Personal Insurance solutions, such as coverage for high-value homes and internationally exposed risks. 

RATES

P&C rates are moderating, with a competitive environment across most lines. Property pricing is decelerating rapidly following several years of profitability and a mild catastrophe environment, though it remains sensitive to future CAT activity. 

Casualty rates, while stabilizing, are inconsistent based on various factors such as class of business, jurisdiction, line of business, limit and more. Broadly speaking, modest increases exist in most segments; however, underlying loss trends—including social inflation, litigation funding, and rising claim severity—still limit downward rate pressure, particularly in higher-risk sectors. 

CAPACITY

Capacity is strong across most sectors, driven by healthy carrier balance sheets and improved reinsurance conditions. Increased competition is expanding placement opportunities, particularly for well-managed risks. 

The E&S market remains a key source of capacity for complex risks, while admitted carriers are selectively re-entering certain segments. While capacity remains more limited in higher-risk areas, including Habitational, Assault & Battery, Firearms, and Auto, Burns & Wilcox provides unparalleled global market access ensuring desired limits are secured. 

TERMS & CONDITIONS (T&C)

Terms and conditions remain disciplined, particularly in higher-risk and CAT-exposed segments. While some flexibility is emerging in deductibles and coverage structure, variations in exclusions, sublimits, and policy language persist. Careful review of coverage remains essential to ensure alignment with each risk profile. 

Contributor: Paul G. Smith, Group Senior Vice President, H.W. Kaufman Group, New York, NY

Personal Insurance:

As we progress through early 2026, the Canadian Residential Property Insurance market continues to reflect late 2025 trends, with stable conditions, competitive pricing, and available capacity across both standard and specialty segments. Overall, Q1 remained relatively flat, with only modest signs of increased underwriting discipline emerging in select areas.  

As we approach wildfire season, there remains some uncertainty around the potential severity of activity. While recent loss experience has been manageable, insurers are closely monitoring conditions and may apply greater scrutiny to risks in higher wildfire-exposed regions. It is expected that markets will request mitigation details and apply risk surcharges in high-risk areas. Also, it is important for clients to review their coverage early as binding moratoriums will be in place for risks within range of active wildfire activity.   

In lower-risk regions, competition remains strong, and pricing is generally stable. While standard markets have been more lenient in some respects, there continues to be a meaningful volume of hard-to-place business – particularly for risks with prior losses, lapses in coverage, higher insured values, rental activities, vacant/renovation exposure, multiple/non-standard lenders, in-home businesses and seasonal occupancy. These risks are still seeing more underwriting scrutiny and, in most cases, limited standard market appetite. As a result, brokers continue to rely on specialty markets for flexible solutions where risks fall outside standard guidelines.   

Burns & Wilcox continues to expand its Personal Insurance offerings, including the recent launch of a second specialty Homeowners product, positioning us well to support brokers in a stable yet evolving market. 

Q2 outlook: 

• Stable pricing and continued competition for preferred risks  
• Generally open standard market conditions, with some targeted selectivity  
• Ongoing challenges for hard-to-place and non-standard risks  
• Continued reliance on specialty markets for more complex exposures 

Contributor: Michelle Allemang, Manager, British Columbia, National Product Leader, Personal Insurance, Burns & Wilcox, Vancouver, BC

Commercial Insurance:

As we move through Q2, the Commercial Insurance market remains competitive, with soft—but stabilizing—conditions across Canada. Following a prolonged soft market cycle, we are seeing improved renewal retention, with rate levels generally holding flat.  

Our focus remains on delivering flexible, tailored solutions for complex and hard-to-place Property and Liability risks, supported by expanded capacity and targeted product offerings. Key highlights include: 

• Property capacity up to $15 million 
• Commercial Real Estate risks (including vacant and mixed occupancies) 
• Student and rooming houses 
• Hospitality operations 
• A broad range of contractor classes

Burns & Wilcox stands apart through responsive service, disciplined underwriting, ongoing product development, and strong partnerships with our retail brokers and markets. 

Contributor: Patricia Sheridan, Managing Director, Burns & Wilcox, Toronto, ON

Construction

The Construction Insurance market remains soft, driven by increased competition from new MGAs and sustained pricing pressure. As we move through Q2, rates are showing signs of stabilization, supporting a more balanced and sustainable market environment. 

Concerns around tariffs, inflation, and supply chain disruptions continue to impact material costs and project timelines. These factors remain key considerations for Construction risks and insurance needs. 

Burns & Wilcox offers solutions for Construction risks of all sizes, supported by a strong product portfolio and a commitment to excellent service. Ongoing enhancements to the Builder’s Risk program provide added value and flexibility for brokers and their clients. 

Contributor: Steven Hrab, Director, Construction, Burns & Wilcox, Toronto, ON

Professional Liability:

Although the market remains soft across most lines of business in the insurance industry, the Professional Liability space has found ways to remain competitive during this period. Burns & Wilcox has made a concerted effort to develop and expand our current offerings, while also becoming more technically sound.  

We continue to listen and work closely with our broking partners and supporting markets to expand our capabilities. This collaboration has strengthened our in-house offerings for Architects & Engineers (A&E), Accountants, and other Miscellaneous classes, as well as our in-house Cyber offering, including cybercrime. Our focus remains on providing solutions for clients through faster, more efficient service by leveraging our in-house capabilities. 

Additionally, we have gained momentum through an expanding appetite in the Health and Wellness space. Our product is a packaged policy approach that is designed to provide clients with coverage to address their key risk exposures. 

Our commitment to delivering exceptional solutions remains unchanged, supported by both established relationships and newly formed market alliances that allow us to maintain competitive pricing in today’s environment. 

Contributor: Danion Beckford, Senior Underwriter, Professional Liability, Burns & Wilcox, Toronto, ON 

Transportation Insurance:

The Transportation sector enters the second quarter with a cautious outlook. Freight volumes have stabilized but have yet to show meaningful growth, and most carriers remain focused on protecting margins rather than pursuing aggressive expansion. Equipment costs, labor shortages, and financing pressures persist, prompting operators to maintain lean fleets and prioritize profitability over scale. 

The extended soft market conditions continue to drive strong competition amongst our insurer partners. Capacity remains abundant, with many insurers offering flexible terms to retain market share. While this benefits buyers in the near term, it also places pressure on underwriting discipline, particularly as loss frequency driven by nuclear verdicts and social inflation has not significantly improved. Risk selection and high-quality data remain key differentiators for securing optimal terms. 

Cross-border operators are also navigating added complexity from tariffs. Increased border friction, additional documentation requirements, potential cost pass-through, and shifting trade flows are making long-haul routes more difficult to price and predict. Insurers will be closely monitoring how this volatility influences fleet composition, routing strategies, and cargo valuations. As 2026 progresses, long-term stability will hinge less on rate movement and more on how effectively companies adapt to evolving cost structures and a competitive underwriting environment. 

Burns & Wilcox offers specialized Transportation solutions designed to help retail brokers and their clients navigate these challenges and address emerging coverage gaps. 

Contributor: Tyson Peel, Regional Vice President, Canada Division, Burns & Wilcox, Toronto, ON  

Environmental Insurance:

The Canadian Environmental Impairment Liability (EIL) market remains soft as we move through Q2, 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 remains price-sensitive; however, established broker–underwriter relationships are supporting 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 expected in the near term. Underwriting discipline holds firm, alongside a gradual expansion of available capacity and increased willingness to consider broader risk profiles. This measured growth reflects a collaborative approach to placing business amid ongoing competitive and economic pressures. 

The traditional late-year surge seen in 2025 began earlier than usual and has carried into 2026. Rate compression persists, but responsive pricing strategies and disciplined underwriting are helping to sustain market stability and consistent placement outcomes. 

Contributor: Karim Jaroudi, Manager, Environmental, Burns & Wilcox, Toronto, ON

MARKET PERSPECTIVE FROM A CARRIER LENS

As we reported in our Q1 P&C report, we continue to see the Property and Casualty markets exhibit different dynamics. 

Property 

The E&S Property market continues to soften, with declining rates, abundant capacity, and a buyer-friendly market. Rates are decreasing across all segments, with terms and conditions broadening through lower deductibles, elimination or increase of sub-limits, and expanded coverage. Additionally, we are seeing limit expansion, with carriers increasing participation and line sizes. 

The Property reinsurance market also remains soft, with significant CAT placement rate decreases reported by major reinsurance intermediaries. April reinsurance renewals saw pricing reductions in the mid to high teens, depending on the peril and geography. Despite reinsurers’ desire to maintain a degree of pricing discipline, cedants are finding capacity plentiful, with virtually all placements oversubscribed. These reinsurance rate reductions will further contribute to the softening market on the direct side. 

Casualty 

For E&S carriers, the U.S. Liability market remains both a challenge and an opportunity. As Property growth becomes even more difficult due to rapid market softening, carriers and MGAs are turning to Casualty for growth, even when signs are telling them to proceed with caution.  

Industry data shows a majority of carriers have had to strengthen U.S. Liability reserves consistently over the last 10 years. Carriers and reinsurers alike view Liability loss trends as increasing over the past few years due to rising claim litigation, claim severity, and social inflation. However, these profitability headwinds are often being offset by overcapacity in both the direct and reinsurance Casualty markets. 

As a result, while we are still seeing rate increases in the Casualty market, there is a view that rate increases are moderating across a majority of segments. The rate environment does vary by segment, though, with Auto Liability still seeing the highest rate increases, followed by Excess Liability and then General Liability. We are starting to see a greater frequency of flat renewals in General Liability, especially in classes such as contractors, office, and LRO. However, individual account rate activity is still very dependent upon class, venue, and prior performance. In this sense, there is a high degree of segmentation in the Liability market. Due to abundant capacity, with no signs of it regressing, we do expect the Casualty market to show more signs of softening in the coming year. 

Contributor: Chris Zoidis, President and Chief Executive Officer, Atain Insurance Companies, Farmington Hills, MI

LONDON MARKET 

The London market plays a critical role in supporting complex and non-standard risks, particularly where domestic capacity is limited or underwriting appetite is constrained. Demand from North America is strong, driven by the need for flexible solutions, broader coverage structures, and access to global capacity.  

Complex Property risks are a primary driver of activity, including CAT-exposed accounts, older construction, and risks with valuation uncertainty. Retail brokers are increasingly turning to London for certainty of capacity and the ability to efficiently build layered programs. 

High-hazard Casualty and large-limit Liability placements are also contributing to increased demand. Social inflation, litigation trends, and growing limit requirements when many domestic carriers are shortening limits, are pushing more risks into both the London and Bermuda markets, where underwriters are able to offer more flexible structures and bespoke solutions.  

In addition, the London market is seeing growth in emerging and evolving risks, including Cyber, Renewable Energy, and technology-driven exposures. These risks often fall outside traditional underwriting models, making London a natural fit for customized coverage solutions.  

Expanding Role in SME and Multinational Risks  

One notable shift is London’s growing role in supporting small to mid-sized enterprise (SME) Property risks, particularly in the $10 million to $25 million value range. Historically focused on larger, more complex placements, the market is increasingly competing in this segment by improving speed, efficiency, and accessibility.  

Demand for multinational solutions is also increasing, particularly for clients with exposures across multiple jurisdictions. The London market’s ability to provide non-admitted coverage and coordinate global placements continues to differentiate it from domestic markets.  

This trend is also reflected in the Personal Insurance space. Burns & Wilcox, in collaboration with Burns & Wilcox Global Solutions, recently introduced a multinational Homeowners Insurance solution designed to address the growing need for consistent, cross-border coverage. This offering highlights the Burns & Wilcox global platform in delivering coordinated solutions for internationally exposed risks.

Technology and Market Evolution  

The London market is becoming faster and more data-driven, with increased adoption of digital placement tools and advanced analytics improving both speed to market and underwriting precision.  

These developments address historical challenges around responsiveness, making it easier for brokers to access London capacity efficiently, particularly for complex and time-sensitive placements.  

Parametric solutions are also expanding beyond traditional catastrophe applications, with new use cases emerging across a broader range of exposures.  

Outlook  

Looking ahead, demand for London market solutions is expected to grow steadily, particularly for complex, high-value, and multinational risks. As domestic carriers recalibrate appetite in certain segments, London continues to provide flexible underwriting, global reach, and efficient access to capacity for risks that fall outside standard market parameters. 

Contributors: Declan Durkan, Managing Director, Non-Marine, Burns & Wilcox Global Solutions, London, UK; Kerry Hall, Head of Burns & Wilcox Lloyd’s Products, Burns & Wilcox Global Solutions, London, UK   

CONCLUSION

The P&C market in Q2 2026 reflects a more competitive environment, with moderating rates and expanding capacity across many lines. At the same time, underwriting discipline remains firmly in place, as carriers continue to focus on risk quality, profitability, and long-term performance. 

Property markets are benefiting from improved conditions following recent CAT stability, while Casualty lines continue to face pressure from litigation trends and rising loss severity. Across both segments, outcomes remain highly dependent on risk characteristics, loss history, and the overall quality of submissions. 

As market conditions evolve, the role of the broker remains critical. Clearly defining client needs, presenting well-structured submissions, and leveraging access to both domestic and global markets are essential to securing optimal coverage and pricing. 

Through its broad carrier relationships, specialized expertise, and integrated global platform, Burns & Wilcox is well positioned to support brokers in navigating complex risks and delivering tailored solutions in a dynamic P&C marketplace. 

Contributor: Paul G. Smith, Group Senior Vice President, H.W. Kaufman Group, New York, NY 

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.