Insights from Analysts on the 2026 Property and Casualty Insurance Market

In a recent analysis, Fitch Ratings and Morningstar provided insights into the evolving landscape of the U.S. property and casualty (P/C) insurance market, reminiscent of the predictions made by groundhog Punxsutawney Phil.

• Fitch Ratings anticipates that the U.S. property/casualty market will continue to soften through 2026, driven by increased competition, abundant capital, and downward pricing pressure.
• Morningstar highlights that despite a surge in litigations and rising payouts, the U.S. casualty insurance market remains attractive due to its size, product diversity, regional variations, and pricing flexibility.
• Victor Adesanya, Morningstar’s Senior Vice President of Global Insurance & Pension Ratings, notes, “We expect casualty insurance pricing to remain divergent from the rest of the P&C insurance market in the near term.”
• According to Fitch, the anticipated softening rates in the P/C market are unlikely to impact credit ratings significantly, as most insurers benefit from a diversified product mix and geographic presence, allowing them to increase casualty insurance rates.
• Fitch also warns that insurers may experience slowing revenue growth due to the easing rate environment amid ongoing macroeconomic uncertainties.
• In the realm of property-catastrophe reinsurance, softening market conditions are expected to persist through the midyear 2026 renewals in April (Asia-focused) and June/July (Florida).

For further insights, check out the related article, “Insurance Groundhogs Warming Up to Market Changes.”

Personal Lines: Shopping and Switching

In a separate report, J.D. Power examined whether American drivers and homeowners are likely to remain with their current insurers or switch to competitors for better rates this year.

Overall, shopping and switching rates saw a slight decline in the fourth quarter of 2025, particularly among residential property owners and renters, who are increasingly exploring options but not changing carriers, according to the latest Loyalty Indicator & Shopping Trends (LIST) report from J.D. Power, in collaboration with TransUnion.

Notably, the report indicates a significant drop in the frequency of renters switching insurance providers in the fourth quarter of 2025 compared to previous periods.

Auto insurance: The overall shopping rate for auto insurance in the fourth quarter was 13.0%, reflecting a decrease of 0.2 points from the third quarter of 2025 and 0.4 points from the same quarter in 2024. The switching rate also fell to 4.1%, down from earlier periods.

Home insurance: The average shopping rate for home insurance in the fourth quarter was 6.8%, slightly above the 6.6% averages for the previous quarters. However, the switching rate of 2.4% was 0.4 percentage points lower than the third quarter of 2025 and 0.2 points below the fourth quarter of 2024.

Renters insurance: While both home and renters insurance switching rates peaked in the third quarter of 2025, renters experienced a sharper decline. The fourth-quarter switching rate for renters was 3.8%, down 1.2 points from the previous quarter and 0.9 points year-over-year.

The report also sheds light on customer behavior, indicating that lower credit-based customers were more active in shopping for auto and home insurance last year. Northeasterners led the charge in auto insurance shopping, while West Coast residents began seeking better deals later in the year.

According to the LIST report, Progressive emerged as the biggest beneficiary of auto insurance shopping activity. However, it also faced the highest churn rate among insurers. For home and renters insurance, State Farm attracted the most shoppers but also experienced significant customer departures, while Allstate had the highest percentage of defectors in the home insurance sector.

How They’ll Buy: Accenture Weighs In

Consultant Accenture recently shared five predictions for the insurance industry in 2026. While some forecasts focused on life insurers, the final prediction is particularly relevant for P/C insurers.

The prediction states, “Embedded distribution will scale from ‘adjacent channel’ to a core growth engine.” By the end of 2026, insurers that successfully generate a significant share of new premiums through embedded distribution with digital trading partners are likely to lead in new business growth.

Accenture emphasizes that insurance placement is shifting towards critical decision-making moments, such as checkout, onboarding, renewal, and workflow completion. This shift highlights the importance of making insurance simple and accessible at these key points.

Furthermore, they note that growth will concentrate in ecosystems where protection can be easily bundled into transactions or workflows, such as purchasing auto insurance through OEM and dealer ecosystems. Accenture’s research indicates a growing customer interest in acquiring insurance during the auto buying journey.

In discussing embedded channels for home insurance, they mention “home and smart-building ecosystems”—including utilities, IoT platforms, and smart-home services—where risk mitigation and services can complement insurance coverage.

“Execution won’t hinge on rhetoric. We believe that the winners will be those carriers that can offer API-first products, seamless partner onboarding, and flexible embedded offers that enhance the value proposition beyond mere distribution,” they conclude.

Topics
Trends
Property Casualty
Market

In a recent analysis, Fitch Ratings and Morningstar provided insights into the evolving landscape of the U.S. property and casualty (P/C) insurance market, reminiscent of the predictions made by groundhog Punxsutawney Phil.

• Fitch Ratings anticipates that the U.S. property/casualty market will continue to soften through 2026, driven by increased competition, abundant capital, and downward pricing pressure.
• Morningstar highlights that despite a surge in litigations and rising payouts, the U.S. casualty insurance market remains attractive due to its size, product diversity, regional variations, and pricing flexibility.
• Victor Adesanya, Morningstar’s Senior Vice President of Global Insurance & Pension Ratings, notes, “We expect casualty insurance pricing to remain divergent from the rest of the P&C insurance market in the near term.”
• According to Fitch, the anticipated softening rates in the P/C market are unlikely to impact credit ratings significantly, as most insurers benefit from a diversified product mix and geographic presence, allowing them to increase casualty insurance rates.
• Fitch also warns that insurers may experience slowing revenue growth due to the easing rate environment amid ongoing macroeconomic uncertainties.
• In the realm of property-catastrophe reinsurance, softening market conditions are expected to persist through the midyear 2026 renewals in April (Asia-focused) and June/July (Florida).

For further insights, check out the related article, “Insurance Groundhogs Warming Up to Market Changes.”

Personal Lines: Shopping and Switching

In a separate report, J.D. Power examined whether American drivers and homeowners are likely to remain with their current insurers or switch to competitors for better rates this year.

Overall, shopping and switching rates saw a slight decline in the fourth quarter of 2025, particularly among residential property owners and renters, who are increasingly exploring options but not changing carriers, according to the latest Loyalty Indicator & Shopping Trends (LIST) report from J.D. Power, in collaboration with TransUnion.

Notably, the report indicates a significant drop in the frequency of renters switching insurance providers in the fourth quarter of 2025 compared to previous periods.

Auto insurance: The overall shopping rate for auto insurance in the fourth quarter was 13.0%, reflecting a decrease of 0.2 points from the third quarter of 2025 and 0.4 points from the same quarter in 2024. The switching rate also fell to 4.1%, down from earlier periods.

Home insurance: The average shopping rate for home insurance in the fourth quarter was 6.8%, slightly above the 6.6% averages for the previous quarters. However, the switching rate of 2.4% was 0.4 percentage points lower than the third quarter of 2025 and 0.2 points below the fourth quarter of 2024.

Renters insurance: While both home and renters insurance switching rates peaked in the third quarter of 2025, renters experienced a sharper decline. The fourth-quarter switching rate for renters was 3.8%, down 1.2 points from the previous quarter and 0.9 points year-over-year.

The report also sheds light on customer behavior, indicating that lower credit-based customers were more active in shopping for auto and home insurance last year. Northeasterners led the charge in auto insurance shopping, while West Coast residents began seeking better deals later in the year.

According to the LIST report, Progressive emerged as the biggest beneficiary of auto insurance shopping activity. However, it also faced the highest churn rate among insurers. For home and renters insurance, State Farm attracted the most shoppers but also experienced significant customer departures, while Allstate had the highest percentage of defectors in the home insurance sector.

How They’ll Buy: Accenture Weighs In

Consultant Accenture recently shared five predictions for the insurance industry in 2026. While some forecasts focused on life insurers, the final prediction is particularly relevant for P/C insurers.

The prediction states, “Embedded distribution will scale from ‘adjacent channel’ to a core growth engine.” By the end of 2026, insurers that successfully generate a significant share of new premiums through embedded distribution with digital trading partners are likely to lead in new business growth.

Accenture emphasizes that insurance placement is shifting towards critical decision-making moments, such as checkout, onboarding, renewal, and workflow completion. This shift highlights the importance of making insurance simple and accessible at these key points.

Furthermore, they note that growth will concentrate in ecosystems where protection can be easily bundled into transactions or workflows, such as purchasing auto insurance through OEM and dealer ecosystems. Accenture’s research indicates a growing customer interest in acquiring insurance during the auto buying journey.

In discussing embedded channels for home insurance, they mention “home and smart-building ecosystems”—including utilities, IoT platforms, and smart-home services—where risk mitigation and services can complement insurance coverage.

“Execution won’t hinge on rhetoric. We believe that the winners will be those carriers that can offer API-first products, seamless partner onboarding, and flexible embedded offers that enhance the value proposition beyond mere distribution,” they conclude.

Topics
Trends
Property Casualty
Market