2026 Property Insurance Outlook: What Buyers Need to Know to Stay Ahead

Written by: Cottingham & Butler Food & Agribusiness Group

A Moment to Reflect Before We Look Ahead

As 2025 drew to a close, many of us pause to take stock - of what worked, what changed, and what lies ahead. For risk managers and insurance buyers, this reflection is more than tradition, its strategy. The property insurance market has shifted dramatically over the past two years and understanding where it’s headed in 2026 is critical for setting goals, budgets, and expectations. 

With softening trends accelerating, admitted and non-admitted markets colliding, and coverage terms evolving, now is the time to ask: Will the E&S market plateau - or continue to soften? And how should you position to capture the upside while protecting against volatility? 

What’s behind the softening? 

1. Capacity Surge: New entrants and returning carriers have boosted competition, driving down rates and improving terms. In many placements it’s typical to see oversubscription of 50-70% on individual layers, a clear signal that markets are eager to deploy capital.  

2. Reinsurance Relief:  After historically tough 1/1 renewals in 2023, risk adjusted property CAT rates fell in January and midyear 2025 (loss free programs down ~10–15%; higher layers down up to ~20%), with strong ILS participation and healthy retained earnings driving supply. That relief has trickled down to primary property pricing and terms.  

3. Profitability: While catastrophe (CAT) losses remain elevated, industry capital levels are strong. 2024 ranked as the third-costliest year for natural catastrophes, with losses approaching $140 billion. For 2025, natural-catastrophe losses are projected to decline by approximately 13–24%. Reinsurers and markets closed out 2025 with robust capital positions and higher attachment points, reinforcing overall resilience. This strength is expected to support continued market softening - barring the occurrence of an extreme peak-loss event. 

Bottom line: The E&S property market is not likely to reharden broadly in 2026 without a severe, capital eroding catastrophe. We expect continued softening/plateau characteristics: modest rate decreases, expanding capacity, and better terms. 

Where are the improvements? 

• Deductibles: In 2025, many insureds capitalized on favorable market conditions to secure lower deductibles. During the hard market cycle from 2017 to early 2024, deductible levels often climbed to uncomfortable thresholds, shifting more risk retention onto buyers. As competition intensified, carriers were compelled to offer reduced deductible options with minimal impact on overall pricing - reflecting the depth of current market flexibility. 

• Limit Correction: Many insureds are leveraging today’s competitive market to reinvest savings into higher limits. During the hard cycle of 2017 to early 2024, buyers often reduced total limits - driven by cost pressures or limited capacity. With abundant supply and improved pricing, organizations are now restoring or expanding limits to strengthen balance sheet protection and meet lender or contractual requirements. 

• Terms & conditions: As competition intensifies, markets are offering enhancements to differentiate themselves. Buyers are seeing “blanket” coverage reinstated, removal of restrictive endorsements such as Occurrence Limit of Liability (OLLE), higher margin clauses, and increased sublimits for critical exposures. These improvements reflect carriers’ willingness to provide broader protection as part of their competitive strategy. 

Admitted vs. Non-Admitted Collide 

• Converging economics. As E&S softens (rate, deductibles, broader terms), some admitted carriers still push rate for technical adequacy. The result: both channels now compete head-to-head on price and form in segments that have been historically dominated by the admitted marketplace.   

• Scale and Share. E&S now represents a much larger slice of commercial lines than a decade ago; NAIC/AM Best data show a sustained shift of complex property risks to non-admitted carriers - especially in FL/CA/LA. As admitted appetite expands in select niches, the contest will be won on form, price, capacity, and engineering cred, not just license status.  

Strategies for Insureds in a Softening Cycle 

1) Double down on Risk Engineering. The best price cuts and coverage offerings are going to data rich, engineered facilities with credible valuations, CAT hardening (roof, defensible space, flood measures), and maintenance discipline. Underwriters are rewarding evidence, not anecdotes.  

2) Treat valuations as a competitive weapon. Accurate valuations (cost/sq ft) and modern cost indices unlock broader blanket limits and reduce margin clause friction.  

3) Revisit Program Structure. Take advantage of larger participation from competitive carriers and cleaner tower structures. Look to explore higher limits, lower deductibles, all while achieving modest rate reductions.  

4) Push Non-Admitted vs Admitted Options. Admitted vs. E&S is no longer a foregone conclusion for some sectors of the Food/Ag industry.  In 2026, lead with whichever channel wins on economics + form + engineering support, not label. Expect side-by-side options and a structured recommendation. 

5) Invest in Relationships - Domestic and Overseas. Reinsurer appetite and London/Bermuda capacity are relationship sensitive. Consistent submissions, technical calls, and plant tours with underwriting and engineering teams generate durable concessions (limits, terms, perils) that outlast a single renewal cycle. 

Closing Thoughts:  

The property insurance market has shifted dramatically - and opportunities like this don’t last. For nearly six years, buyers absorbed higher deductibles, trimmed limits, and accepted restrictive terms because there was no alternative. Today, the pendulum has swung. Capacity is plentiful, coverage is broadening, and markets are competing to win your business. 

The question isn’t “Will the market stay soft?” - it’s “Are you positioned to take advantage before it changes again?” 

Every renewal is a chance to reset your strategy: 

• Could you restore limits cut during the hard cycle? 

• Reduce deductibles without adding cost? 

• Secure blanket coverage and remove restrictive endorsements? 

These aren’t hypothetical - they’re happening now for those who act. Waiting means leaving value on the table and risking being caught when the cycle turns.