P&C Report: 2026 Q4 Outlook

INTRODUCTION

Increased capacity, heightened competition, and emerging risks are creating new opportunities and challenges across the Property & Casualty (P&C) Insurance marketplace as 2026 draws to a close. 

In Property Insurance, these conditions support more favorable pricing and coverage options. Liability presents a different picture, as litigation trends and rising claims severity put pressure on rates. 

Despite greater competition, insurers continue to emphasize disciplined underwriting and profitable growth. Market conditions vary considerably by coverage, geography, and individual risk, reinforcing the importance of specialized expertise, comprehensive submissions, and strong relationships as brokers and agents prepare for 2027. 

International Expansion into the U.S. Market 

International insurers are expanding their presence in the U.S. marketplace, bringing additional capacity and competition. Japanese groups such as Tokio Marine and Sompo, to name a few, have expanded through overseas acquisitions, while Korean insurers are pursuing opportunities beyond their domestic markets. 

The motivations of these global carriers extend beyond current U.S. pricing. Mature domestic markets, aging populations, and limited growth prospects make overseas expansion attractive. The U.S. offers a large market and opportunities to diversify earnings, especially in the non-admitted space. 

In an analysis published by Insurance Journal, Fitch Ratings reported that 86% of approximately $35 billion in major acquisitions by Fitch-rated Japanese insurers over the preceding decade involved U.S. investments. The analysis also noted that North America accounts for about 40% of global non-life insurance premiums. 

Additional market participation can increase competition, although the effect on pricing depends on the risks and lines insurers choose to write. 

AI-Related Risks

AI-related risks extend beyond Technology Errors & Omissions and Cyber Insurance into a broad range of professions. Consider an engineer who uses AI to help determine column spacing and building loads. If a design error contributes to a structural failure, the resulting claim could raise questions about professional responsibility and coverage. Similarly, a law firm using AI to prepare court documents could face liability if inaccurate information results in harm.

How insurers will ultimately address AI-related exposures remains uncertain, particularly whether coverage will be provided through existing policies, sublimits, or standalone products. In the meantime, insurers are clarifying policy language and developing endorsements. Some policies expressly provide AI-related coverage, while others remain silent.

Carriers are emphasizing risk controls and human oversight as AI becomes more widely adopted. Underwriters are expected to ask more detailed questions about how insureds use AI and what safeguards are in place. Brokers and agents should carefully review policy language to understand how coverage may respond to AI-related claims.

RATES

Property Insurance pricing has become more competitive as insurers pursue business and capacity expands. Favorable July 1 reinsurance renewals helped support this trend. Most accounts qualify for lower rates and better terms, although results depend on location, loss history, occupancy, construction, and property valuations. 

This does not mean Property Insurance rates will keep falling indefinitely. Discussions at the October Council of Insurance Agents & Brokers (CIAB) annual Insurance Leadership Forum reflected concerns about the current level of rates approaching or at their technical floors.  

Liability presents a different picture. Commercial Auto remains particularly challenging, with many insureds facing double-digit increases. Other Casualty lines continue to face pricing pressure as insurers assess litigation trends and rising claims costs. Rates that do not keep pace with loss costs quickly erode underwriting profits. 

Social inflation adds to these challenges. Larger jury awards, litigation practices, and third-party litigation funding can push claims costs beyond ordinary economic inflation. Recent Swiss Re Institute research estimates social inflation increased U.S. liability claims by 57% over the preceding decade. 

CAPACITY

Although capacity has improved in several segments, market conditions vary considerably by coverage and risk. Insurers continue to prioritize underwriting discipline, profitability, and effective risk management as they prepare for 2027. 

Increased Property Insurance capacity gives brokers and agents additional placement options. Admitted carriers are broadening their appetites in select areas, while international insurers pursue U.S. business. This creates opportunities to explore higher limits, fewer restrictions, and coverage for risks that previously attracted limited interest. However, these opportunities are account-specific, and catastrophe losses and changing regional conditions could affect pricing and availability. 

The Excess & Surplus (E&S) market continues to play an important role for specialty and difficult-to-place risks, even as premium growth slows. AM Best reported total U.S. surplus lines premiums rose 10.4% in 2025 to $143.2 billion, while premium growth among domestic surplus lines insurers slowed to 8.9%. 

AM Best also expects demand for customized coverage to limit a broad shift back to admitted carriers. Price matters, but so does the ability to address complex and emerging exposures. 

TERMS & CONDITIONS (T&C)

Underwriting discipline remains a priority across the P&C marketplace, even as increased capacity and competition create opportunities for more favorable terms in select segments. 

In Personal Insurance, accurate property valuations, routine maintenance, and proactive loss prevention can influence coverage terms. Casualty underwriters are scrutinizing loss histories, geographic exposures, policy limits, and attachment points more closely as claims severity and litigation costs increase. 

In Professional Liability, some primary insurers are reducing the limits they offer, requiring greater participation from Excess markets. Carriers are also adhering more closely to policy language when evaluating claims, reinforcing the importance of reviewing coverage terms and potential gaps. Insurers are evaluating how policies respond to emerging AI-related exposures, with some introducing endorsements or clarifying coverage provisions. 

While admitted carriers are becoming more competitive in select areas, their underwriting guidelines may not provide the flexibility needed for complex risks. The E&S marketplace offers opportunities to customize coverage based on individual exposures and insureds’ needs. 

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

Personal Insurance:

As we move through the final quarter of 2026, increased market capacity is creating 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 (TIV) risks have also strengthened our position in the high-value home segment, with capacity available up to $10 million TIV. 

With two Homeowners programs now available, brokers have greater flexibility to match risks with the most appropriate market and coverage solution. Key differentiators include: 

• Homeowner Pool: Provides Sewer Backup and Overland Water full policy limits for eligible Homeowners, Rented Dwellings, Seasonal, and Secondary Home risks 
• Markel program: Offers highly competitive pricing for risks with Total Insured Values of $2 million and above 

Submission activity remains strong, supported by competitive pricing, comprehensive coverage offerings, and product features designed to address the evolving needs of Personal Insurance clients. 

As brokers look toward 2027, disciplined underwriting, strong carrier relationships, and expanded appetite position Burns & Wilcox 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 as year-end approaches, with stable pricing and strong capacity across many segments. 

Burns & Wilcox has expanded its specialty offerings and underwriting capabilities to provide brokers with additional options for complex and hard-to-place risks. These capabilities include increased in-house Property capacity up to $20 million and a Retail Vape Program offering Commercial General Liability coverage and Broad Property coverage with extensions at competitive pricing. 

New Protective Services Program 

Burns & Wilcox has introduced a Protective Services program designed for a broad range of security professionals and related service providers. Key capabilities and target classes include: 

• Coverage options including Commercial General Liability, Failure to Perform, Errors & Omissions, Non-Owned Auto, Property and Equipment Breakdown, Crime/Employee Dishonesty, and Cyber  
• Security operations including static and mobile guards, event security, loss prevention, executive protection, private investigations, and K9 patrol  
• Installers and contractors working with fire and security alarms, CCTV/cameras, access systems, fire suppression equipment, portable fire extinguishers, and sprinklers  

Beyond these specialty offerings, Burns & Wilcox maintains a strong appetite for Hospitality risks, including high-liquor establishments; hard-to-place Commercial General Liability risks; and 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 

Construction Insurance:

The Construction Insurance market remains soft, driven by increased competition from new MGAs and sustained pricing pressure. As 2026 enters its final quarter, rates are showing signs of stabilization, supporting a more balanced and sustainable market environment. 

Tariffs, inflation, and supply chain disruptions are still impacting material costs and project timelines, making these factors important considerations for Construction risks and related insurance needs. 

Burns & Wilcox offers solutions for Construction risks of all sizes, supported by a strong product portfolio and a commitment to excellent service. Enhancements to the Builder’s Risk program provide added value and flexibility for brokers and their clients as they prepare for 2027. 

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

Cannabis Insurance:

The Cannabis Insurance market remains competitive, with Property rates softening 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 
• Growers across Personal, Micro Cultivation, and Standard Cultivation risks 
• 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  

Professional Liability:

In the Professional Liability space, we are seeing greater focus on specialized coverage needs due to contractual requirements. This represents a shift from earlier in the year, when price was often the primary determining factor for both new and renewal business. 

Our team works closely with broking partners and supporting markets to expand our capabilities and address increasingly nuanced coverage requirements. This collaboration has strengthened our in-house offerings across: 

• Accountants 
• Architects & Engineers 
• Cyber 
• Media 
• Technology 

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

Heading into 2027, established relationships and regular dialogue with our market partners help Burns & Wilcox deliver competitive pricing and coverage while responding to evolving client needs. 

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

Transportation Insurance:

The Transportation sector approaches year-end with a watchful outlook. Freight volumes have stabilized but have yet to show significant growth, while most carriers are 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. 

Soft market conditions are driving strong competition among insurer partners, with abundant capacity and flexible terms available as many insurers seek to retain market share. While this benefits buyers in the near term, it also places pressure on underwriting discipline, particularly as loss severity driven by nuclear verdicts and social inflation has not significantly improved. Risk selection and high-quality data are key differentiators for securing optimal terms. 

The C.H. Robinson verdict has highlighted freight brokers’ potential exposure to catastrophic auto claims, prompting some markets to begin reducing capacity, and becoming more stringent when evaluating a risk. There is a heightened focus on carrier vetting, contractual liabilities, and risk management practices on carrier selection. 

Cross-border operators are also navigating added complexity from tariffs and changing trade conditions. Key considerations include: 

• Increased border friction 
• Additional documentation requirements 
• Potential cost pass-through 
• Shifting trade flows 
• Changes in fleet composition, routing strategies, and cargo valuations 

These factors are making long-haul routes more difficult to price and predict. Looking toward 2027, 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: Samuel Wilson, Senior Underwriter, Inland Marine, Burns & Wilcox, Toronto, ON  

Environmental Insurance:

The Canadian Environmental Impairment Liability (EIL) market remains soft heading toward year-end, with competitive conditions across most segments. Several factors are shaping the current environment: 

• Participation from newer MGAs is sustaining downward pressure on pricing 
• Industry consolidation, including mergers and acquisitions, is influencing contractor risks 
• Pockets of financial strain are affecting contractor risks and, to a lesser extent, select premises exposures such as manufacturing and industrial operations 

Renewal activity is price-sensitive; however, established broker–underwriter relationships are supporting strong retention outcomes. While premium levels are 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 through the remainder of 2026. Underwriting discipline is holding firm as available capacity gradually expands and markets show greater willingness to consider broader risk profiles. This measured growth reflects a collaborative approach to placing business amid competitive and economic pressures. 

Looking toward 2027, rate compression and competitive pricing are expected to remain important market considerations, while disciplined underwriting will be essential to supporting market stability and consistent placement outcomes. 

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

LONDON MARKET:

Property Insurance

Market sentiment heading into the WSIA Annual Conference was characterized by apprehension. The U.S. Property market has softened considerably faster than anticipated, raising concerns about pricing sustainability and the point at which insurers may begin to withdraw capacity. The pace of Property rate deterioration has exceeded expectations. A quiet hurricane season to date has contributed to continued downward pressure, with limited catastrophe losses providing little hope for pricing stabilization.  

Hurricane Isaias appeared to have the potential to slow down market conditions in that isolated region when the storm strengthened but as its path moved east to the Florida Panhandle the impact was much less than initially feared. Preliminary reports suggest damage was relatively limited, offering little prospect of a loss-driven change in market direction. Reinsurance rates are expected to decline again on the January 1 renewals, placing additional pressure on already compressed property pricing. Lower reinsurance costs could allow insurers to remain competitive for longer, potentially extending the softening cycle.  

London syndicates are forecasting a further 5-15% rate deterioration in the U.S. contract binding market. Following the reductions already experienced this year, the market appears to be approaching a critical point for pricing discipline. Although many syndicates refer to having a minimum acceptable price, there was little evidence to suggest London markets are at their threshold or withdrawing.  

Meanwhile, new domestic and London entrants continue to enter the catastrophe-exposed Property market. This additional competition raises the question of at what point will pricing become insufficient to sustain participating capacity? Despite the pressure on rates, property valuations and, for the most part, deductibles are holding firm. This provides a measure of underwriting stability, with pricing competition not yet accompanied by widespread erosion of these terms.  

The central concern is not simply that Property rates are falling, but the speed of that decline and the absence of a clear market response. As we move towards the new year, the market will be closely monitoring reinsurance renewals, further capacity entry, and whether insurers begin to enforce their stated pricing thresholds.  

Contributor: Kerry Hall, Vice President, London Products, Burns & Wilcox, Tampa, FL

Casualty Insurance 

Larger, more complex U.S. General Liability and Excess Liability accounts are a key opportunity for London, alongside specialist placements suited to individual insurer appetites. 

Capacity is available, but Casualty underwriters remain selective about where they attach and how much limit they commit. Claims severity, litigation, and uncertainty over reserves are expected to influence Q4 renewals. Pricing pressure is likely to remain most pronounced in Commercial Auto and parts of the lead Umbrella and Excess market, particularly for severity-exposed accounts. Competition may be more evident on selected well-performing risks and higher excess layers; primary, lead-excess and high-excess outcomes should not be described as uniformly hardening. 

The difference between accounts remains important. A sound loss record and effective controls should attract interest; deteriorating claims and difficult jurisdictions will narrow the options. Construction, transportation, public entity, habitational and healthcare accounts warrant particular attention. 

London should be considered as a planned component of U.S. Casualty programs, not solely a source of replacement capacity. Depending on class and insurer appetite, opportunities may include specialist primary, lead excess and higher excess placements. Early engagement should establish achievable attachment points and line sizes, supported by clear exposure information and credible claims analysis, rather than simply seeking to renew the existing structure. 

Professional Liability Insurance 

We expect competition to continue across many Professional Liability classes through Q4, although the pace of rate reductions may slow, and outcomes will vary by segment. Stronger accounts should use this position to review limits, improve coverage clarity and breadth, and close coverage gaps. 

Cyber

Buyers are expected to retain room to negotiate, provided their controls meet underwriting expectations. On larger or more complex risks, the review should concentrate on business interruption, critical technology and outsourced-service dependencies, sublimits, and exclusions – not price alone. Strong controls do not establish that cover is adequate: policy triggers, waiting periods and aggregation provisions also require review. 

Directors & Officers (D&O)

The market is expected to remain competitive for many financially sound buyers, although further reductions may become less consistent. Public-company, private-company, and financial-institution risks should be considered separately. Financial resilience, governance, sector, claims experience and program structure will influence insurer appetite; financial stress, insolvency concerns and regulatory exposure may restrict choice. This does not imply a uniform pricing floor or market turn. 

Errors & Omissions (E&O)

Well-performing E&O accounts, including Technology E&O, should continue to see opportunities for flat or reduced pricing through Q4, although outcomes will vary by profession, claims experience, contractual commitments and the potential for a single service failure to affect multiple clients. Professional errors, missed deadlines, and contractual disputes are common sources of claims. AI-related services, oversight and dependencies warrant closer scrutiny, but do not alone establish market-wide hardening. Buyers should seek broader, clearer coverage – not simply lower premiums – with attention to insured services, retroactive dates and the interaction between E&O and Cyber exclusions. London should be considered for planned specialist placements and excess capacity, subject to insurer appetite, rather than only where domestic options are exhausted. 

Medical Malpractice

Selected lower-hazard allied healthcare accounts may attract competition, but Healthcare Professional Liability remains differentiated by service, jurisdiction, and claims experience. Hospitals, higher-acuity providers and severity-exposed excess programs are expected to require particular attention to capacity, attachment points and pricing. Claims severity and defense costs remain concerns. London may provide specialist and excess capacity, subject to insurer appetite and a clear account of claims development, clinical governance, staffing and changes in services. Check that cover remains consistent between layers. 

Sexual Abuse & Molestation (SAM)

Standalone SAM is attracting new capacity, while traditional General Liability and package insurers are restricting abuse coverage. This can produce more competition for selected standalone placements at the same time as buyers experience tighter terms in their wider casualty programs. AI-generated sexualized images, deepfakes, online grooming, peer-on-peer misconduct and covert recording using wearable devices are emerging underwriting concerns. Clarify whether digital conduct falls within sexual misconduct, abuse, privacy, Cyber or other exclusions. A uniform market-wide wording change has not been established. Q4 2026 is best viewed as a two-speed market: increased competition in selected standalone placements, alongside continued restrictions and challenging terms across parts of the wider casualty market. The strongest opportunities are likely to be well-controlled risks needing specialist cover, while legacy-heavy, high-severity and poorly documented accounts remain difficult. 

Contributor: Declan Durkan, Managing Director, Non-Marine, Burns & Wilcox Global Solutions, London, UK

CONCLUSION:

As the industry prepares for 2027, increased capacity and competition are creating new opportunities across the P&C Insurance marketplace, although challenges persist in certain segments. While more favorable pricing and broader coverage options are available for many risks, rising claims severity, emerging exposures and shifting carrier appetite reinforce the importance of disciplined underwriting and effective risk management. 

Brokers and agents who focus on understanding their clients’ exposures, evaluating coverage options, and identifying appropriate markets will be well positioned to deliver value beyond price alone. With broad market access, specialized underwriting expertise and strong carrier relationships, Burns & Wilcox can help brokers and agents navigate complex risks and develop tailored insurance solutions to meet their clients’ needs. 

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.