The Baldwin Group has reported the sharpest divergence yet between commercial property and casualty pricing since it began tracking the market in its quarterly Market Pulse Report in late 2024.
In its latest report, the independent brokerage found commercial property pricing falling at a record pace, while key casualty lines either re-accelerated or held to solid positive increases. The data, based on aggregated placement activity and market behavior, pointed to a market moving away from broad, cyclical swings and toward more line-specific conditions shaped by loss experience, litigation trends and individual risk quality.
“Market conditions are no longer moving in a single direction,” said Leslie Nylund, national managing director of broking and insurance company partnerships at The Baldwin Group. “As conditions diverge across lines, it’s becoming more important to understand how different risks interact and how decisions in one area can affect outcomes across the broader insurance program.”
Commercial property pricing declined 7.1% on average, continuing a multi-quarter softening trend driven by strong capacity and heightened competition. This marks the steepest negative reading for property since the Market Pulse Report was launched in Q4 2024.
Workers’ compensation also remained soft, dipping a further 0.9% and extending its pattern of slight, steady decreases.
By contrast, casualty lines continued to show upward pressure, albeit with some signs of moderation. General liability increases eased back to 6.1% from 9.3% in Q4 2025, but Baldwin pointed to the ongoing influence of social inflation and litigation trends. Commercial auto moderated to a 5.7% increase, though severity drivers such as nuclear verdicts and rising repair costs remain elevated. Umbrella pricing rose 8.2%, reversing three consecutive quarters of deceleration and signaling that concerns around social inflation and large verdicts remain a key factor in underwriting.
The report also pointed to shifting dynamics in management liability and cyber, where recent softening has been more nuanced.
Cyber pricing moved back into positive territory, up 1.1%, suggesting early signs of firming as threat activity and loss experience continue to build.
Management liability remained mixed. Private company placements recorded modest average increases of 3.3%, down from 4.8% the previous quarter, while public D&O programs continued to see competitive conditions and an average decline of 3.5%.
Looking ahead, Baldwin expects the current pattern of divergence to continue, with further softening likely in property and workers’ compensation, sustained pricing pressure across many casualty lines, and evolving conditions in both cyber and management liability.
The firm described 2026 as a year defined by segmentation: underwriters are drawing sharper distinctions by risk quality than at any other point in the current cycle, and the gap in outcomes between well-documented, well-managed accounts and the rest is widening.
“As the property market continues to provide broad pricing reprieve to many insureds, casualty uncertainty persists. While there are signs of moderation in pockets, evidenced by selective competition, structural underwriting concerns remain unchanged. In this market, differentiating with data and analytics is the key to optimizing renewal terms and providing greater certainty to underwriters," Nylund said.
The Baldwin findings are broadly consistent with other market indicators that show a softening property market alongside more resilient or rising casualty pricing. Marsh’s Global Insurance Market Index reported global commercial insurance rates declining by about 4% in both the second and third quarters of 2025, driven largely by falling property rates amid abundant capacity and increased competition, even as casualty continued to trend upward, particularly in the US.
Separately, The Council of Insurance Agents & Brokers found that 2025 ended with the softest overall commercial P&C market conditions since 2017, with average premiums across all account sizes rising just 0.2% in Q4 2025 and large-account premiums declining on average. Multiple lines, including commercial property, cyber, D&O, employment practices liability and workers’ compensation, recorded average decreases, while commercial auto posted the highest increase at 6.6%.
These trends help explain why Baldwin’s property index shows such a pronounced negative reading: competition and improved reinsurance terms are putting downward pressure on property pricing, particularly for well-protected, non-cat-exposed risks.
For casualty, however, social inflation, higher jury awards, medical and repair cost inflation, and adverse loss development in excess layers are keeping underwriters cautious and supporting continued firm conditions in general liability, commercial auto, umbrella and parts of the management liability market.
