Commercial property premiums fell 1.2% across all account sizes in the first quarter of 2026, the first decline since the third quarter of 2017, according to Alliant Insurance Services' 2026 Mid-Year Insurance Marketplace Insights and Observations Report. The report, now in its ninth edition, draws on data from Alliant's specialized broking teams across more than a dozen industry sectors.
The split between property and casualty is the defining theme at mid-year. Property buyers are seeing rate reductions in the high single digits to more than 20%, with some real estate insureds recording double-digit decreases for the second or third consecutive renewal.
Casualty lines tell a different story. Auto liability rates are running between 7% and 25%, umbrella liability between 10% and 20%, and excess liability between 8% and 18%. The gap between the two halves of the market is now the broadest it has been in years.
Social inflation, nuclear verdicts, and third-party litigation funding are the primary drivers of casualty pressure. The report notes that social inflation increased US liability claims by 57% over the past decade.
The US Supreme Court's unanimous ruling in Montgomery v. Caribe Transport II added further exposure for the transportation sector. Freight brokers and intermediaries can now be held liable for negligent carrier selection under state laws. The report expects that outcome to keep upward pressure on primary and excess insurance costs in the sector.
Cyber rates have held relatively steady despite worsening loss activity. Ransomware attacks were four times higher in 2025 than in 2020 and 50% higher than in 2024. The US accounted for 58% of attacks globally. Most industries are still seeing flat to 5% decreases at renewal, with healthcare and public entity the main exceptions at 5% to 10% or more.
The insurance-linked securities market posted a record $25.6 billion in issuance in 2025, up 44.6% from 2024. Outstanding ILS value reached $61.3 billion by year-end 2025, and year-to-date 2026 issuance had already reached $15.5 billion by early May. Spreads remain elevated at 5.61% as of May 1, 2026, though they have declined from 2022-2024 highs.
The parametric market is expanding alongside ILS growth. The 2025 global parametric market was valued at more than $19 billion and is expected to grow at a double-digit pace over the next decade. Coverage has moved well beyond traditional windstorm and earthquake triggers to include cyber, drought, rainfall, crop yield, and temperature-based programs.
The captive market continues to attract attention as a pressure release for buyers in challenged lines. The report estimates 7,000 to 8,000 licensed captive insurance companies exist across all types, with close to 50,000 organizations potentially using group captive arrangements when cells and participation are included. Alternative risk financing costs are rising, driven by labor, service provider, and reinsurance pressures.
Healthcare remains the most stressed liability sector. Hospital professional liability rates range from 8% to 35%, and building an excess liability tower may now require twice as many carriers as in prior years. Sexual abuse and misconduct coverage remains restrictive across higher excess layers.
In construction, data centers are the clearest growth driver, with demand for AI infrastructure and cloud computing producing large and complex placements. Casualty, auto liability, and umbrella coverage remain the main pressure points for contractors regardless of project type.
The life sciences sector is tracking a surge in biopharma deal activity. Aggregate biopharma deal values in 2025 exceeded $90 billion through the first three quarters, a total that surpassed all of 2024. Close to 80% of life sciences executives believe AI will be a major catalyst for their sector's transformation, the report said.
Verisk and the American Property Casualty Insurance Association (APCIA) reported an estimated $63 billion US property and casualty industry underwriting gain in 2025, driven more by unusually low catastrophe losses than by structural improvement in risk. For real estate owners, office sector distress deepened, with Trepp reporting the overall commercial mortgage-backed securities delinquency rate at 7.47% in January 2026 and the office delinquency rate at an all-time high of 12.34%.
Buyers with strong data, credible valuations, and documented risk controls are commanding materially better terms across property and some professional lines. Those without are facing a more selective market regardless of the broader pricing trend.
