U.S. commercial insurance rates rose 2.5% in the first quarter of 2026, marking a third consecutive quarter of moderating rate increases as the market continues to soften, according to WTW’s Commercial Lines Insurance Pricing Survey released in June.
The aggregate price increase reflects a sharp deceleration from the same period last year, when rates climbed 5.3% in Q1 2025. The slowdown extends a trend that began in late 2025: rates grew 3.8% in both Q2 and Q3 2025, then eased to 2.9% in Q4 2025 before dropping further to 2.5% in the first quarter of this year.
Most commercial insurance lines continued to show moderate to significant price increases in Q1 2026, though the pace has softened across the board. Workers compensation, directors’ and officers’ liability, commercial property, and cyber insurance all reported decreases or flat pricing. Commercial auto—one of the hardest-hit lines in recent years—posted its first price increase below double digits since the third quarter of 2023, a milestone that underscores the broader cooling in the market.
The moderation reflects a shift toward a soft insurance market, where increased competition and growing insurer capacity are putting downward pressure on premiums. Carriers have been building capital reserves and expanding underwriting appetite, reducing the pricing power they wielded during the preceding hard market years. This environment favors policyholders, who are seeing more stable or declining renewal rates across most coverage types.
The trend aligns with industry forecasts from late 2025 that predicted premium growth would decelerate in 2026 after years of sharp increases. Analysts noted that strong underwriting performance and improved combined ratios in 2025 gave insurers room to compete more aggressively on price. The soft market is expected to persist through at least mid-2026, though underwriting discipline remains important as carriers balance growth with profitability.
Sources
- WTW — Commercial Lines Insurance Pricing Survey Q1 2026, showing 2.5% aggregate price increase and quarterly trend data
- Yahoo Finance — Reporting on WTW’s Q1 2026 survey, confirming 2.5% increase down from 5.3% year-over-year
- Insurance Journal — Coverage of WTW’s pricing survey and third consecutive quarter of moderation
- Reinsurance News — Analysis of softening trends and increased capacity driving moderation
- Amwins — 2026 market outlook noting robust capacity from Lloyd’s and domestic E&S markets
