Property insurance rates expected to fall further

COLORADO SPRINGS, Colo. — Property insurers and brokers expect rates to continue falling into 2026 unless a major windstorm hits the United States before hurricane season ends Nov. 30.

Meeting at the Insurance Leadership Forum this week, past the midpoint of the season, senior executives said the sometimes double-digit rate decreases seen over the past year will continue as new capacity enters the market.

The price declines, which began last year, came after six years of hardening; however, the property line remains profitable, they said during interviews at the meeting, which is sponsored by the Council of Insurance Agents & Brokers.

“There continue to be double-digit rate decreases in property and the natural catastrophe exposure is seeing more than that, so 10% to 20%,” said Marc Kunney, San Francisco-based president, risk management and national specialties, at EPIC.

Even multifamily and habitational accounts, which are viewed as riskier, are seeing decreases of 5% to 10%, he said.

“If there are natural catastrophes, things can change very quickly, but the early returns are that we’re going to continue to see rate decreases, Mr. Kunney said.

While property rate declines may not accelerate, they are unlikely to decelerate, said Jon Drummond, head of broking, North America, at Willis Towers Watson.

Insurers want to grow, and new capacity is entering the market through traditional and nontraditional reinsurance, he said.

“You’re seeing investment vehicles being created that allow (insurance-linked security) capacity and alternative capital to come in and support the retail insurers with a smaller barrier to entry,” Mr. Drummond said.

If the hurricane season remains quiet, more pressure could build on property rates, said J. Powell Brown, president and CEO of Brown & Brown.

The pricing pendulum may previously have swung too far toward higher rates in previous years and is in the process of swinging back, he said.

“Property prices got high, maybe too high, and so they’ve come back. Depending on the number of storms that make landfall in the next year or two, we may have an extended softening,” Mr. Brown said.

While the property insurance pricing environment is shifting, it follows a period in which technical pricing was restored, said Adrian Hall, New York-based CEO, U.S., at Swiss Re Corporate Solutions.

“I would characterize it more as a recalibration in the marketplace, from a U.S. perspective, and not a retreat,” he said.