US commercial insurance rates increased 2.5% in Q1 2026, marking a third consecutive quarter of moderating price rises, accorsing to WTW's Commercial Lines Insurance Pricing Survey (CLIPS).
The survey measures pricing changes by comparing premiums for policies underwritten during the quarter with those for the same coverage lines in the prir year. Rates increased 2.9% in Q4 2025 and 3.3% in Q3 2025, continuing a downward trajectory from the 5.3% aggregate increase recorded in Q1 2025. For context, rates had been running at around 6% from H2 2023 through early 2025.
Pricing softened across most commercial lines in Q1, including small commercial, mid-market and large account segments. Excess and umbrella liability remained the line with the highest rate increases, though the pace eased from the prior quarter. Meanwhile, commercial auto rate increases fell below double digits for the first time since Q3 2023.
Workers' compensation, D&O liability, property and cyber were among the lines that did not record moderate to significant price increases, according to the report.
"The first quarter results reflect a continuation of the moderating pricing environment observed over recent quarters," said Yi Jing, managing director of insurance consulting and technology at WTW. "While commercial auto and excess and umbrella liability continue to experience the largest increases, the pace of those increases has eased, with pricing trends across much of the market remaining stable."
The WTW data reflects what analysts are describing as a structurally bifurcated US commercial insurance market.
Property, cyber, financial lines, and D&O are experiencing rate reductions of between 3% and 15%, driven by abundant capacity and improving loss ratios, while US casualty and commercial auto continue to harden, reflecting social inflation and nuclear verdicts.
The capital backdrop is central to the property softening. Reinsurance capital has reached a record $785 billion, a 9% year-on-year increase according to Aon, while the catastrophe bond market stands at an all-time high of more than $52 billion outstanding. The current softening cycle is also moving at approximately twice the pace of the previous soft market, which ran from 2014 to 2017.
On the liability side, however, the picture is markedly different. Awards from nuclear verdicts totaled $31.3 billion in 2024, more than double the figure from 2023. Larger jury verdicts and settlements are pushing claims costs higher across automobile, umbrella, employment practices, and general liability coverages, forcing carriers to deploy capacity selectively, particularly for larger fleets and accounts with recent losses. Annual liability claim costs due to social inflation grew approximately 7% in 2024, the highest annual increase in two decades, according to the Swiss Re Institute.
The Q1 data suggests insurance buyers are gaining negotiating leverage after several years of sustained rate increases and restricted underwriting conditions, though that leverage is unevenly distributed.
Brown & Brown's 2026 Market Trends report found that conditions are shifting in favor of buyers who prepare thoroughly for renewal and carry a positive claims history, while industries such as transportation and hospitality, and operations in risk-prone regions, face less favorable dynamics.
The current environment is unfolding against a backdrop of deteriorating loss trends, thinning reserve margins, and heightened geopolitical risk, which may have knock-on impacts on profitability and capital adequacy in the medium term. Fitch Ratings has revised its global reinsurance outlook to "deteriorating" for 2026, down from "neutral" for 2025, though it expects risk-adjusted returns to remain above the cost of capital as underwriting discipline holds.
CLIPS has been collecting commercial property and casualty pricing data since 2003 and is regarded within the industry as a benchmark for tracking historical changes in commercial insurance prices and loss cost trends.
