P&C Report: 2026 Q3 Outlook

INTRODUCTION

The P&C Insurance marketplace enters the second half of 2026 with a distinctly different outlook than just a few years ago. Increased capacity, decelerating Property rates, and heightened competition are creating new opportunities for brokers, agents, and insureds. 

In this environment, brokers and agents are increasingly revisiting accounts placed during the hard market, evaluating whether broader options may now be available, and positioning well-documented risks for stronger underwriting outcomes. 

Competition is intensifying across many segments as admitted carriers expand their appetite and global insurers deploy additional capacity into the United States. In several Property segments, these dynamics are creating more favorable conditions for well-positioned risks, while also raising questions about how long current pricing levels can be sustained. While one large global P&C insurer announced in late June it would not be chasing property rates any lower, a contrary consensus follows the pivotal July 1 treaty reinsurance renewals which are suggesting 20–25 % rate reductions, according to The Insurer. 

Liability, however, continues to present a more challenging environment. Auto Liability remains one of the hardest segments, with many insureds experiencing double-digit rate increases.  

While pricing has become more competitive across many lines, underwriting discipline remains firmly in place. Carriers continue to emphasize submission quality, accurate valuations, risk selection, transparent risk narratives, and consistent policy terms as they compete for business. 

Despite broader market trends, no single narrative applies across every account. Geography, loss history, occupancy, construction, valuation, and individual risk characteristics continue to drive underwriting outcomes, making account-specific evaluation more important than ever. 

Against this backdrop, the Excess & Surplus (E&S) market remains well positioned to address specialty, complex and difficult-to-place risks. As underwriting appetites continue to shift, Burns & Wilcox remains a valuable resource for brokers and agents, offering broad market access, strong carrier relationships, and specialized expertise to help secure effective coverage solutions. 

RATES

Rate trends are diverging across the P&C marketplace. Commercial Property and many Personal Insurance segments are benefiting from increased competition and abundant capacity, resulting in decelerating rates and expanded options for many insureds. However, pricing remains highly dependent on individual risk characteristics, including catastrophe exposure, loss history, and property-specific factors. 

Liability presents a different picture, with many Casualty lines experiencing flat to upward rate pressure driven by social inflation, litigation trends, and rising claim severity. As a result, brokers and agents may see mixed outcomes across accounts, with more favorable Property pricing offset by continued pressure in Liability-driven placements. 

Although the overall market has become more competitive, carriers remain disciplined in their underwriting approach, placing a strong emphasis on risk selection, accurate valuations, and complete underwriting submissions. 

CAPACITY

Capacity remains abundant across most of the P&C marketplace, driven in part by increased participation from the London and Lloyd’s markets, along with other global insurers seeking a larger share of U.S. business. The U.S. accounts for 45% of worldwide insurance premium volume, according to a 2025 National Association of Insurance Commissioners report, making it the world’s largest insurance market. That position continues to attract international capital seeking opportunities in the P&C space. 

With fewer major catastrophe losses in recent years and U.S. property claim volume declining 8.9% in the first quarter of 2026, according to Verisk, carrier confidence has improved, contributing to broader capacity across Property segments. Even so, capacity is being deployed selectively, particularly for higher-hazard Property and Liability risks. 

TERMS & CONDITIONS (T&C)

Although pricing has become more competitive across many segments of the P&C marketplace, underwriting discipline remains evident in policy terms and conditions. Carriers continue to manage exposure through tightly crafted policy language, exclusions, sublimits, deductibles, and other coverage limitations, particularly for emerging and higher-hazard risks. 

AI is one of the latest areas receiving increased scrutiny, with carriers evaluating a range of approaches, including endorsements, affirmative coverage solutions, and AI-related exclusions or sublimits as the market continues to evaluate this evolving exposure. As with other emerging risks, policy language is expected to evolve as underwriting and claims experience develop. See the Professional Liability (U.S.) section for additional insights into AI-related liability exposures. 

Beyond AI, coverage limitations remain most pronounced across certain high-risk classes, coverages, and exposures, including Asbestos, Directors & Officers (D&O), Errors & Omissions (E&O), Auto Liability, and Habitational risks, and are expected to persist for the foreseeable future. 

As pricing becomes more competitive, brokers and agents should continue to review policy terms carefully, including exclusions, sublimits, deductibles, and endorsements, to confirm that improved pricing does not come with unintended coverage limitations. 

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

Personal Insurance:

As we move into the third quarter, increased market capacity is creating new opportunities within the Personal Insurance market. Burns & Wilcox has expanded its appetite for more complex risks, including mixed occupancies with short- and long-term rental exposures, as well as risks with multiple lenders. Higher Total Insured Value risks have also strengthened our position in the high-value home segment, with capacity available up to $10 million Total Insured Value. 

With two Homeowners programs now available, brokers have greater flexibility to match risks with the most appropriate market and coverage solution. Key differentiators include our Homeowner Pool, which provides Sewer Backup and Overland Water full policy limits for eligible Homeowners, Rented Dwellings, Seasonal, and Secondary Home risks, and our Markel program, which offers highly competitive pricing for risks with Total Insured Values of $2 million and above. 

We have also seen increased submission activity driven by competitive pricing, comprehensive coverage offerings, and product features designed to address the evolving needs of Personal Insurance clients. 

Supported by disciplined underwriting and strong carrier relationships, Burns & Wilcox remains well positioned to provide solutions for a broad range of Personal Insurance risks. 

Contributor: Alison Sanelli, Senior Underwriter, Personal Insurance, Burns & Wilcox, Toronto, ON

Commercial Insurance:

The Commercial Insurance market in Canada remains highly competitive, with stable pricing and strong capacity across many segments. 

Burns & Wilcox continues to enhance its offerings through new specialty programs and expanded underwriting capabilities, including: 

• Increased in-house Property capacity up to $20 million 
• New Retail Vape Program offering Commercial General Liability coverage and Broad Property coverage with extensions at competitive pricing 
• New Security Services Program 

Areas where Burns & Wilcox maintains a strong appetite include: 

• Hospitality risks, including high-liquor establishments 
• Hard-to-place Commercial General Liability risks 
• Challenging Property risks, including recycling operations, unprotected properties, metal scrap businesses, second-hand stores, and online retailers 

Contributor: Patricia Sheridan, Vice President, Commercial Insurance, Toronto, Burns & Wilcox, Toronto, ON 

Professional Liability Insurance:

In the Professional Liability space, we are beginning to see a greater focus on specialized coverage needs due to contractual requirements. This represents a shift from previous quarters, where price was often the primary determining factor for both new and renewal business. 

Our team continues to work closely with our broking partners and supporting markets to expand our capabilities and address increasingly nuanced coverage requirements. This collaboration has strengthened our in-house offerings for Architects & Engineers (A&E), Accountants, Technology, Media, and other Miscellaneous classes, as well as our in-house Cyber offering, including cybercrime. 

Burns & Wilcox maintains a strong appetite for Health and Wellness risks. Our product is a packaged policy approach designed to provide clients with coverage to address their key risk exposures. Due to the momentum in this segment, we have expanded the offering to include contents coverage, providing partners with additional value through a single policy solution. 

Our commitment to delivering competitive solutions remains unchanged, supported by established relationships and ongoing dialogue with our market partners. These relationships help us maintain competitive pricing and coverage while continuing to respond to evolving client needs. 

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

Construction Insurance:

The Construction Insurance market remains soft, driven by increased competition from new MGAs and sustained pricing pressure. As we move into the second half of the year, 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

Cannabis Insurance:

The Cannabis Insurance market remains competitive in Q3, with continued softening in Property rates for Dispensaries and Growers. Our exclusive market relationships, coast-to-coast capabilities, and fast turnaround times support steady growth in a challenging marketplace. New strategic market relationships also allow us to offer Cyber coverage and a more competitive Recall product for broker partners. 

Target classes include Dispensaries and Growers across Personal, Micro Cultivation, and Standard Cultivation risks, as well as building owners with cannabis-related exposures. 

Product highlights: 

• Property capacity of $50,000,000+ 
• CGL limits up to $20,000,000 
• Recall and Cyber capabilities with varying limits 
• Same-day turnaround on Dispensary business, including building owners  

Contributor: Marc‑Anthony Manion, Senior Underwriting Specialist, Cannabis, Burns & Wilcox, Toronto, ON  

Transportation Insurance:

The Transportation sector enters the second half of 2026 with a watchful outlook.  

Freight volumes have stabilized but have yet to show significant 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, Managing Director, Burns & Wilcox, Toronto, ON  

Transportation Insurance:

The Canadian Environmental Impairment Liability (EIL) market remains soft as we move into the second half of 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 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. 

Rate compression persists; however, 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:

The E&S market continues to undergo a meaningful change as competitive pressures increase across multiple lines of business. After several years of robust growth, carriers are now facing a markedly different environment. 

Commercial Property remains the most competitive segment of the E&S marketplace. Rate reductions have accelerated throughout 2026 as new and existing capacity competes aggressively for business with little signs of this slowing. 

Pressure is no longer confined to Property. General Liability pricing is also beginning to face increased competition, particularly on well-performing accounts. While underwriting discipline remains generally intact, carriers are reporting growing pressure to reduce rates and broaden terms to retain desirable business. 

At the same time, admitted carriers are increasingly re-entering classes and accounts that migrated to the E&S market during the hard market cycle. As standard markets expand appetite and pricing becomes more competitive, the flow of risks into the E&S channel has slowed. Many accounts that previously required non-admitted solutions are once again finding admitted alternatives. 

Another concern is the growing impact of the significant expansion in managing general agents (MGAs) over the past several years. As competition for premium volume intensifies, questions are beginning to surface regarding underwriting performance across certain delegated authority and fronted program business. In some cases, pressure to sustain growth expectations and operating margins appears to be outweighing a focus on long-term underwriting profitability. As a result, underwriting results within portions of the fronted program market are showing signs of deterioration. 

Distribution dynamics are also evolving. Large retail brokers continue to seek greater control over placement activity, often consolidating wholesale relationships, negotiating higher compensation levels, and in some cases attempting to access E&S markets directly. These trends are creating additional margin pressure throughout the distribution chain and forcing wholesalers and carriers alike to reassess their value proposition. 

As the market moves through the second half of 2026, carriers are increasingly focused on maintaining underwriting discipline amid a softer pricing environment, heightened competition, and changing distribution economics. 

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

LONDON MARKET:

Property

The U.S. Property insurance market continues to face intensifying competitive pressures, particularly in hurricane‑exposed regions. Increased market capacity, improved reinsurance conditions, and a strong appetite for premium growth have driven significant downward pressure on both rates and deductibles across many territories. While Personal lines are leading this softening in pricing and terms ahead of commercial, there is currently no clear indication of stabilization in either segment at this stage of the cycle. 

Despite increasingly competitive pricing conditions, insurers remain acutely aware that underlying catastrophe risk remains elevated. Many London market participants continue to reference “walkaway” pricing thresholds that have yet to be reached, though there is growing consensus that certain territories may approach these levels within the coming months. It will be critical to monitor where the ultimate floor for pricing settles, with ongoing market commentary suggesting that rates are unlikely to return to the lows experienced in the late 2010s. 

Underwriting discipline therefore remains paramount. London carriers are carefully balancing growth ambitions—or flat portfolio strategies—with the need to maintain profitability. Robust risk selection, disciplined exposure management, and a focus on risk features that enhance catastrophe resilience will be essential to navigating this phase of the cycle successfully. Maintaining adequate returns in an environment characterized by declining rates and downward pressure on deductibles will be a key challenge through upcoming renewal periods. 

Rate adequacy continues to be a central theme, both during and following the hard market. Many London syndicates and company markets have openly assessed their adequacy positions at a portfolio level. Combined with the significant volume of data now available across the market, this has enabled greater differentiation and pricing accuracy, particularly for ‘best in class’ risks. As a result, the most desirable business has attracted increased competitive pressure, accelerating a return to more traditional E&S dynamics faster than in previous cycles. 

On a more positive note, insured valuations improved materially during the hard market, with replacement costs more closely aligned to actual rebuild values. This has addressed the significant underinsurance seen prior to 2020, which negatively impacted loss ratios during the previous soft cycle. With improved pricing, more sophisticated modelling, and more accurate valuations, the market enters Q3 with cautious optimism that profitable underwriting can still be achieved despite current conditions. 

The general view within the London market is that, in the absence of one or more major catastrophe events, downward pressure on rates and deductibles is likely to persist into Q4 2026 and potentially into Q1 2027. Feedback from the 7/1 reinsurance renewals has reinforced this outlook. 

Casualty and Professional Liability 

The London market continues to operate within a complex and evolving environment across U.S. Casualty and Professional lines. Capacity remains present across both classes; however, underwriting discipline is firmly embedded, with carriers balancing growth ambitions against ongoing profitability considerations. As the cycle develops, there is increasing differentiation between well-performing risks and those that present more challenging underwriting characteristics. 

London’s role is increasingly focused on supporting complex placements, particularly where domestic U.S. capacity is either constrained or selectively deployed. This is most evident within excess layers, where additional capacity is often required to complete programs and where London’s flexibility and structuring capability remain key differentiators. 

Casualty

The U.S. Casualty market continues to be shaped by elevated claims activity, with both frequency and severity trends influencing underwriting behavior. Litigation dynamics and broader social inflation remain central considerations for London carriers, particularly within general liability and excess casualty business. 

Whilst capacity remains available, it is being deployed more selectively. London markets are increasingly focused on higher layers within casualty towers, reflecting both volatility in loss development and a desire to better manage portfolio exposure. As a result, participation in primary layers is more limited, with excess placements representing the core area of London engagement. 

Pricing across much of the casualty market remains firm, particularly in sectors where historical loss experience or exposure complexity presents additional challenges. While competition exists for high-quality risks, especially those with strong underwriting data and favorable loss records, this has not translated into material softening across the broader market. 

Underwriting discipline continues to strengthen, with carriers placing greater reliance on data quality, risk articulation and demonstrated risk management practices. Submission detail is now a critical factor in securing both capacity and favorable terms, with clear differentiation between best-in-class risks and more marginal exposures. 

London continues to play a key role in supporting capacity-constrained placements, particularly those requiring larger overall limits or involving more complex risk profiles. In this context, the market remains an important complement to domestic US carriers, which continue to dominate primary positions. 

Looking ahead to Q3, these dynamics are expected to persist. Unless there is a material shift in underlying claims trends, the market is likely to remain disciplined, with selective capital deployment and continued focus on maintaining underwriting profitability. 

Professional Liability 

The U.S. Professional Liability market has moved towards a more balanced position following the rate corrections experienced in prior periods. London carriers are generally operating from a stronger pricing foundation, contributing to a more stable, albeit still segmented, underwriting environment. 

Capacity across core Professional lines classes—including D&O, EPLI, and Professional Indemnity—remains stable. London continues to support excess layers and more complex or difficult-to-place risks, with selectivity remaining a consistent feature of underwriting approach. 

Within Cyber, the market has entered a more settled phase following recent volatility. Increased underwriting sophistication and improved risk controls have contributed to greater consistency in pricing and coverage approaches, although larger and more complex risks continue to attract heightened scrutiny. 

SAM remains one of the most challenging areas across both Professional and broader liability classes. Appetite is limited, and underwriting remains highly selective, particularly within sectors such as education, healthcare and social services. Coverage structures are often more restrictive, reflecting both the severity potential and reputational sensitivity of the exposure. 

Medical malpractice and allied healthcare exposures continue to require careful underwriting consideration. While London offers meaningful capacity, particularly within excess layers, the long-tail nature of the class and sensitivity to claims development drive a cautious approach, with an emphasis on governance, controls and loss history. 

More broadly, London’s strength in Professional lines lies in its ability to structure layered placements and provide tailored solutions where domestic capacity is constrained or unavailable. This flexibility remains a key differentiator, particularly for complex or non-standard risks. 

Looking forward, the Q3 outlook is one of relative stability, with competition increasing for well-performing risks while underwriting caution persists in more challenging areas. 

In summary, the London market remains a key strategic partner in supporting U.S. Casualty and Professional Liability business, with its role increasingly focused on excess-layer participation and complex placements. 

Casualty continues to operate under pressure from claims trends, driving a disciplined approach to capacity deployment and maintaining firm underlying market conditions. Professional Liability, while more balanced, remains segmented by risk quality, with certain classes attracting greater underwriting scrutiny than others. 

Across both classes, London’s ability to provide flexible, specialist capacity for complex or difficult-to-place risks remains its core strength. This aligns closely with the Burns & Wilcox Global Solutions model, supporting the delivery of tailored solutions to U.S. wholesale partners in an increasingly competitive environment. 

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 second half of 2026 presents new opportunities for brokers and agents, but success will depend on recognizing that no single trend applies to every risk. While increased competition, abundant capacity, and decelerating Property rates are creating new possibilities across many segments, underwriting discipline remains strong. The industry’s continued flight to quality reinforces the importance of comprehensive submissions, thoughtful risk selection, and experienced wholesale partners. 

As market conditions stabilize across many segments, brokers and agents should revisit coverage decisions made during the hard market, explore broader coverage options, and evaluate whether existing placements continue to meet their clients’ needs. At the same time, emerging risks, including AI, Cyber threats, and changing weather patterns, underscore the importance of staying informed as underwriting priorities evolve. As competition intensifies, comprehensive submissions, accurate valuations, and transparent risk narratives are becoming increasingly important differentiators, helping brokers and agents secure stronger underwriting outcomes and more efficient quote turnaround times. 

An experienced wholesale partner such as Burns & Wilcox helps brokers and agents navigate an increasingly dynamic marketplace. With broad market access, specialized underwriting expertise, global reach, and strong carrier relationships, Burns & Wilcox is prepared to help brokers and agents deliver effective solutions for their clients. 

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.