Nearly all commercial lines are in a soft market: Willis

Willis Towers Watson said Friday that nearly all commercial insurance lines — aside from excess casualty — are in a soft market, creating favorable conditions for buyers.

In its latest Marketplace Realities report, Willis said  ample capacity and advanced technologies are helping buyers secure broader coverage, strengthen their structural positions and reevaluate their portfolios in a more flexible market.

Backed by industry surplus over $1 trillion and reinsurance capital over $725 billion, insurers are pursuing growth across multiple lines, Willis said.

In its forecast for 2026, Willis said property rates continue to trend downward, with catastrophe-exposed property or challenged occupancies likely to decline by 20% or remain flat, while non-catastrophe-exposed property risks can expect decreases of 5% to 10%.

“This accelerating trend is most pronounced for multi-carrier, shared and layered placements,” the report said.

The outlook remains heavily contingent on the Atlantic hurricane season or other large, unforeseen CAT events, Willis said.

General liability is expected to be up 2% to 10% in North American casualty markets, while umbrella/excess liability will see increases of 5% to 20%.

“The market is becoming more selective, applying pricing pressure even to traditionally lower-risk profiles. Litigation trends continue to drive costs, with tort expenses growing at an annual rate of 8.7%, outpacing GDP growth,” the report said.

Auto liability remains challenging, with rates surging by 14.9% in the second quarter, marking the 36th consecutive quarter of rate increases. Auto liability rates are expected to be up 8% to 20%.

Workers compensation is forecast down 3% to up 2%.

Directors and officers public company coverage is forecast at down 3% to flat, while private company cover is forecast down 5% to flat, the report said.

Cyber coverage is forecast to be down 5% to up 5%. “We are currently seeing flat primary and excess cyber renewals, and capacity continues to be readily available,” the report said.

The political risk insurance market remains a hard market but is showing flexibility, especially for multi-country programs that exclude high-risk areas such as China and Taiwan. Flat to 10% rate increases are expected.