US property and casualty insurers sharply improved their underwriting performance in the first half of 2026, but the stronger industry balance sheet is translating into sharply different renewal conditions across property and casualty lines.
Private P&C insurers recorded an estimated net underwriting gain of $31.7 billion in the first six months, up from $11.6 billion at midyear 2025, figures from Verisk and the American Property Casualty Insurance Association showed. The industry's combined ratio improved to 92.7 from 96.5, while incurred losses and loss adjustment expenses fell 4.8% year over year. Policyholders' surplus reached $1.30 trillion, up from $1.13 trillion.
Premium growth slowed sharply at the same time. Net written premiums increased 2.1%, compared with 5.2% in the first half of 2025 and 10.8% in the equivalent period of 2024.
"In good news for policyholders, premium increases continued to moderate in the first half of 2026, falling below general inflation and building materials and labor costs. Net written premium growth slowed to 2.1% in H1 2026, from 5.2% in H1 2025 and a recent peak of 10.8% in H1 2024," said Robert Gordon, senior vice president of policy, research and international at APCIA.
That moderation is showing up most clearly in commercial property, where stronger insurer capital and expanding capacity are putting more pressure on pricing.
The Council of Insurance Agents and Brokers' second-quarter market survey found average commercial premiums fell 2% across all account sizes in Q2, led by a 6.3% decline in commercial property. Three-quarters of respondents reported increased property capacity, while some large accounts saw renewal decreases exceeding 10%, alongside higher sublimits and lower deductibles.
Small accounts also declined, down 0.5%, making the softening broadly distributed rather than confined to the largest buyers.
Marsh's second-quarter US pricing data showed an even steeper property decline, with US commercial property rates falling 13% - part of a global composite that has now decreased for eight consecutive quarters. Catastrophe-exposed programs with more than $1 million in premium recorded average reductions of 20%, while smaller non-catastrophe programs fell 10%.
After several years of harder pricing, the shift is giving attractive property risks more leverage at renewal - not only on premium, but also on limits, deductibles and terms that had tightened earlier in the cycle.
Reinsurance is reinforcing that shift. Guy Carpenter's July renewal data showed its global property catastrophe rate-on-line index falling 16% at midyear, reflecting continued competition in the reinsurance market and adding another source of capacity behind primary property placements.
Casualty, however, is moving in the opposite direction.
Marsh found US casualty rates increased 7% in Q2, and 11% excluding workers' compensation. Risk-adjusted umbrella and excess rates rose 15%, while some insurers limited individual umbrella and excess capacity to $10 million amid concerns over litigation exposure.
CIAB recorded the same divergence. Umbrella premiums increased 5.3% and commercial auto rose 4.5%, while 40% of respondents reported reduced umbrella capacity. Some carriers were using decreases in property and workers' compensation to offset increases required in umbrella and commercial auto.
"While insured natural-catastrophe losses provided a temporary reprieve in the first half of 2026, bodily injury and commercial liability losses continued to worsen. Excess liability, umbrella liability, commercial auto, and other casualty lines experienced ongoing pressure from escalating claim severity, nuclear verdicts, and rising medical costs," Gordon said.
The pressure is also visible in carrier results. AM Best maintains negative outlooks for commercial auto and general liability, while its latest P&C analysis found commercial auto recorded another $2 billion of reserve deficiencies in 2025, largely tied to the 2023 and 2024 accident years.
The split means falling property prices do not necessarily translate into an equivalent reduction in total insurance spend. Savings on property can instead help absorb casualty increases, fund additional limits or support changes in program structure.
The stronger overall industry result also comes with an important qualification. The Los Angeles wildfires weighed heavily on first-half 2025 performance, meaning the improvement to a 92.7 combined ratio partly reflects a lighter catastrophe burden rather than a uniform improvement in underlying loss trends.
Insurers nevertheless entered the second half with greater financial capacity. Net investment gains rose to $59.6 billion from $49.0 billion, while net income after taxes increased 53% to $77.8 billion. That strength is being tested against a still-heavy catastrophe burden. Verisk estimates average annual insured catastrophe losses at approximately $171 billion globally, with roughly $117 billion attributable to the US.
The stronger balance sheet gives insurers more room to compete, but not necessarily more willingness to take every risk. Renewal outcomes are becoming more dependent on where carriers see acceptable returns, leaving pricing and capacity increasingly shaped by the specifics of each account rather than by the direction of the market as a whole.
