If you’ve been buying commercial insurance over the last few years, you know the feeling. Every renewal felt like bracing for impact, with premiums climbing higher and higher. It’s been a long, tough ride.
Well, take a deep breath. For the first time in what feels like forever, we’re seeing a real shift. The relentless hard market is finally losing its grip.
According to the latest report from The Council of Insurance Agents & Brokers (CIAB), the commercial property and casualty market officially flipped into a soft market in the first quarter of 2026. After 33 straight quarters of increases, average premiums actually declined. It’s a small drop, just -1.2%, but it signals a massive change in direction. Let’s break down what’s happening and what it means for you.
What a Difference a Quarter Makes
Think of the insurance market like a pendulum. For years, it was stuck on the “hard market” side—high prices, strict underwriting, and carriers being extremely picky. Now, it’s finally swinging back toward a “soft market,” and that’s good news for insurance buyers.
The latest CIAB survey shows that brokers are seeing it across the board:
- Lower Pricing: Carriers are getting more competitive to win your business.
- Flexible Terms: Underwriting is getting a bit looser and more accommodating.
- More Appetite: Insurers are willing to take on risks they might have flat-out declined a year or two ago.
This shift isn't uniform, though. The size of your business seems to play a big role in how much relief you'll see.
Large accounts, the ones with annual commissions over $100,000, are seeing the biggest benefit. Their premiums dropped by an average of 2.7%. For medium-sized accounts (between $25k and $100k), premiums fell by a healthy 1.9%.
Interestingly, small accounts (under $25k) still saw a slight increase of 1.1%. But even that is a positive sign, as it’s way down from the 2.8% hike they saw at the end of last year. The tide is turning for everyone, it’s just reaching the bigger ships first.
Commercial Property Is Leading the Price Drop Parade
If there’s one area where the soft market is hitting with full force, it’s commercial property. This line saw a stunning 5.5% average premium decrease in the first quarter. To put that in perspective, just last quarter it was still hovering around a -0.7% decrease. This is a dramatic acceleration.
So, what’s going on? It’s simple: competition.
Carriers are hungry for property business again. The CIAB report found that 72% of brokers are seeing more underwriting capacity flood into the market. One broker from the Southwest even described the property market as being "down significantly with all premium accounts."
This is happening because, after years of disciplined underwriting and steep rate hikes (remember those 20%+ increases in 2023?), carriers are in a much healthier financial position. An AM Best report noted that the industry’s loss ratio for commercial property improved in 2025, even with some major wildfire and storm activity.
Basically, the tough medicine of the hard market worked. Insurers built up a strong premium base, and now they feel confident enough to start competing on price again. We’re even seeing better terms and conditions on some catastrophe-exposed properties, which would have been unthinkable just a year ago.
But Don’t Expect a Discount on Your Fleet Insurance
Now for the not-so-good news. While most of the market is softening, there’s one line that’s still stubbornly, frustratingly hard: commercial auto.
Instead of dropping, commercial auto premiums rose by an average of 5.8% in Q1 2026. This marks the 59th consecutive quarter of increases for this line. That’s nearly 15 years of non-stop price hikes.
Even brokers who see some easing in other areas still call commercial auto “problematic.” And they’re not wrong. AM Best recently identified it as “one of the worst-performing P&C segments over the last 10 years.” The numbers are pretty grim, with the line posting massive underwriting losses year after year.
Why is commercial auto such a mess? It’s a perfect storm of factors:
- Accident Frequency: Distracted driving and congested roads mean more claims.
- Lawsuit Severity: We’re seeing more "social inflation" and "nuclear verdicts," where jury awards in accident lawsuits are skyrocketing.
- Rising Costs: Medical care is more expensive. Vehicle repairs are, too, thanks to inflation and all the complex technology (sensors, cameras, etc.) packed into modern trucks and cars.
- A Tech Paradox: Ironically, AM Best pointed out that some of the technology designed to make driving safer is also contributing to higher repair costs when an accident does happen.
For now, it seems like commercial auto is just stuck in its own painful, hard-market reality.
A Quick Look at the Broader Market
So, property is down and auto is up. What about everything else? It’s a bit of a mixed bag, but the overall trend is definitely leaning toward relief.
Here’s a quick rundown of where other major lines landed in Q1 2026:
- Workers' Compensation: Down 3.7%
- Cyber: Down 3.5%
- D&O Liability: Down 2.1%
- Employment Practices: Down 1.8%
- General Liability: Up 2.6%
- Umbrella: Up 4.8%
- Surety Bonds: Flat at 0.0%
As you can see, more lines are seeing decreases than increases. The days of double-digit hikes across your entire insurance program seem to be over.
What Does This All Mean for You?
The message is clear: it’s officially a buyer’s market again for most commercial insurance lines. After years of being on the defensive, you now have some leverage.
This is the perfect time to have a proactive conversation with your insurance agent or broker. Don’t just wait for your renewal notice to land on your desk. Start planning now. This is your chance to shop your policies, negotiate for better terms, and see if you can lock in some of these savings.
Just be prepared for that tough conversation about commercial auto. But for property, cyber, and many other lines, the door is open for a much more pleasant renewal experience than you’ve had in a long, long time. Welcome to the soft market. It's been a while.
