As businesses close out the year and prepare for 2026, many owners and financial leaders are asking the same question. What will the insurance market look like next year, and what steps can we take now to be in the strongest position possible?
After several years of volatility, the industry is stabilizing in some areas, yet becoming more selective in others. Carriers are still focused on strong risk profiles, accurate valuations, solid loss histories, and operational resilience. At the same time, broader economic pressures and emerging risks continue to influence pricing and underwriting behavior.
Below is a practical look at what business owners, CFOs, and risk leaders should expect from the 2026 insurance environment and how to prepare for it.
1. Stabilization in Some Lines, Continued Pressure in Others
Many commercial lines are showing signs of leveling out, particularly where claims performance has improved. However, other sectors continue to see pressure due to severe weather, litigation trends, higher repair costs, and supply chain impacts.
Areas showing relative stability:
• Workers’ compensation for well-managed risks
• Property schedules that have updated valuations
• Some segments of general liability with strong controls
Areas that may remain challenging:
• Auto, driven by repair costs and nuclear verdicts
• Property with CAT exposure or outdated valuations
• High-hazard industries such as construction trades or manufacturing
The key takeaway is that 2026 will reward businesses that stay proactive rather than reactive.
2. Underwriters Will Expect Better Data, Cleaner Submissions, and Clearer Stories
The underwriting environment continues to prioritize businesses that can demonstrate strong risk posture. That means 2026 submissions will need to be more complete and more data-driven than in the past.
Underwriters will expect:
• Accurate property valuations
• Updated loss runs and trend explanations
• Evidence of operational improvements
• Better documentation around fleet, subcontractor management, training, and safety
• Clarity around revenue, payroll, exposures, and organizational changes
Businesses that can provide clean and comprehensive information from the beginning will see better terms and smoother renewals.
3. Litigation, Social Inflation, and Nuclear Verdicts Will Continue to Influence Pricing
Legal trends remain a significant driver of pricing, especially for general liability, commercial auto, and umbrella. The continued rise of nuclear verdicts, third-party litigation funding, and higher settlement expectations is creating headwinds for carriers.
Business owners should expect:
• More scrutiny around claims history and preventable losses
• Increased attention to training, documentation, and safety protocols
• Higher umbrella costs for certain industries or exposure types
A stronger risk management story will make a measurable difference in negotiations.
4. Extreme Weather and Climate Events Are Changing How Property Is Underwritten
Even businesses outside traditional CAT zones are seeing increased scrutiny. Severe weather events, flooding, hail, and secondary perils remain major contributors to loss activity.
For property especially, carriers may require:
• Updated replacement cost valuations
• Verified construction, occupancy, protection, and exposure data
• Proof of mitigation steps
• Business continuity planning
Businesses that prepare early will have more options and better leverage.
5. Employee Benefits Costs Will Continue to Rise
Benefits costs are projected to increase between eight and ten percent in 2026. The biggest cost drivers will likely include specialty drugs, chronic disease management, and expanded benefit expectations among employees.
Leaders should consider:
• Early renewal planning
• Telehealth and virtual care options
• More flexible and generational benefit offerings
• Supplemental or voluntary plans to manage cost
A strategic benefits review early in the year can help avoid last-minute decisions that raise costs or reduce coverage quality.
6. Cyber and Executive Risks Will Demand More Attention
Cyber incidents continue to rise, particularly ransomware and vendor-related breaches. At the same time, executive liability exposures remain elevated due to employment practices, evolving regulations, and increased litigation.
Decision-makers should expect:
• More attention from carriers on controls, MFA, backups, and vendor risk
• Higher expectations around employee training
• More restrictive underwriting if losses are frequent or controls are not validated
Businesses that invest in stronger controls will be positioned more competitively.
What Leaders Should Do Now
Here are practical steps businesses can take to stay ahead in 2026.
1. Start renewal conversations earlier than usual
Give yourself and your broker enough time to present the best version of your risk.
2. Strengthen your risk narrative
Carriers want to see process improvements, training initiatives, and operational discipline.
3. Update valuations and property schedules
Accurate data is essential for negotiating fair and competitive pricing.
4. Get ahead of benefits planning
Managing rising costs requires early strategy, not last-minute decisions.
5. Review cyber and executive controls
Simple improvements can have meaningful impact on pricing, terms, and carrier appetite.
6. Ensure departments are aligned
Finance, HR, operations, and leadership should work together rather than independently.
Businesses that prepare early will see more options, stronger negotiation outcomes, and more predictable results.
Final Thought
The 2026 insurance market presents both challenges and opportunities. Businesses that invest in clean data, operational discipline, strong controls, and early planning will be best positioned to navigate the year ahead.
If you would like to review your current program or explore ways to strengthen your strategy for 2026, reach out to a Liberty advisor or request a coverage review through our contact page.
Contact a Liberty Advisor and Request a Program review today: https://libertycompany.com/contact/
