After several years of intense market hardening, the E&S Property space is shifting…again. But this time, the movement is in favor of the insured. With capacity returning, rates easing, and market appetite widening, insurance professionals are navigating a very different landscape in the second half of 2025 than they did just a year ago.
Whether you’re building layered property programs or revisiting CAT-exposed accounts, understanding the latest market dynamics is critical. So let’s break down where the market stands right now, what’s driving changes, and what we should expect as we approach 2026.
H2 2025
When researching this, many industry resources referred to the Property market as “stabilizing” after 3 years of premium and retention increases, combined with a dramatic reduction in capacity from a given market on an individual risk. Today we are in a “softening” market, benefiting the Insured clients, in both rate reductions and, in many areas, a reduction in retentions, not least of all CAT Perils, inclusive of Named Windstorm, Earthquake, Convective Storm and Winter Storm.
The other needle that has taken a significant swing is with respect to “Capacity.” Not only are renewal markets increasing their line size, which is leading to the redundancy of the “Buffer Excess” but their old markets that pulled in their horns on certain classes of business over the last 4 years are now back in the pasture, aggressively seeking to pick up a piece of the profitable accounts. Finally, it seems like every month we hear about a new market, usually MGA, opening their doors combined with existing markets, especially from London, expanding their footprint into Bermuda and/or the USA.
So here is the other edge of the sword:
Swiss Re recently posted these numbers. H1 2025 accounted for $80 Billion in Insured CAT loss. Most industry leaders I have spoken with put the number at $100 Billion to see a slowdown in market hardening, or 3 x $25 Billion events (Named Storms), which would impact the primary layers of the cedent companies. Based on the capital coming into the market, I feel, even if one of these scenarios were to occur, any slowing of the softening market would be “peril specific.”
Key market dynamics for this period and the near future include:
- Property line stabilization/softening: Growth, driven previously by catastrophe losses and inflation in property valuation, has peaked in almost all lines of Property, with the possible exceptions being Flood and Wildfire (Convective Wildfire). Rates in H2 of 2025 are expected to continue to average a double digit decrease for most soft occupancies.
- Capacity trends: Primary insurance markets are trending with, often cases, double digit increases in line size in an effort to maintain premium income targets.
- New market entrants and innovation: Recent entrants and new facilities (e.g., MGA platforms) have added capacity and options for structuring shared and layered programs; while enhancing market flexibility and responsiveness these new players are finding it difficult to become relevant in the crowd of established capacity providers. The only way to break through will be to provide significantly broader terms and depressed rates and retentions.
In summary, the E&S property insurance market is continuing to transition with more favorable terms for Insureds, characterized by premium decreases and a wider appetite for risk than we have seen in the last four years.
Forecast for 2026
We should expect to see a slowdown in the unprecedented growth of E&S premiums, currently at $135 Billion (CY 2024), as standard markets restoke their boilers and come back into the market for the “softer occupancy/benign peril” accounts.
Key considerations looking to 2026:
- Hurricane Season: One topic not yet touched on is the 2025 Hurricane Season. The outlook for the remainder of the 2025 Atlantic hurricane season, which runs through November 30, indicates an expected increase in activity as the peak season approaches. So far, the 2025 season has been relatively quiet. Four named storms—Tropical Storms Andrea, Barry, Chantal, and Dexter—formed early but lasted only briefly and contributed low accumulated cyclone energy (ACE), marking one of the slowest starts since 2014. Hurricane Erin is the first storm of the season to reach hurricane status, on August 15, 2025. Tropical cyclone development was initially suppressed by several factors including Atlantic high-pressure patterns, dry Saharan dust, and atmospheric wave interactions, leading to a below-average early season.
- Continued Demand: The demand for E&S insurance will remain robust due to ongoing complexities in the risk landscape, specifically for high-hazard and difficult-to-place risks. As of mid-2025, E&S premiums showed a year-over-year increase of about 13.2%, indicating healthy market activity.
- Rate Decreases: We are at the apex of the Hurricane Season but, in the absence of a series of major or single “mega” event making landfall, the trend is expected to continue to be rate stabilization/decreases, which should persist through Q1 and Q2 with possible “stabilization” in certain tougher/complex risk segments.
- Capacity Adjustments: The market is likely to see a continued rise in available capacity, with the reinsurance market dictating whether the cedent companies will continue to put out bigger lines on individual Insureds’ portfolios. New entrants and innovative coverage structures may provide more options for insureds.
- Impact of Social Inflation: Ongoing challenges such as social inflation, litigation trends, and regulatory scrutiny will keep pressure on pricing and underwriting guidelines, further influencing market dynamics and pricing stability.
Overall, while the E&S property insurance market might not exhibit the explosive growth seen in recent years, it is anticipated to maintain a positive growth trajectory marked by steady premiums and evolving risk coverage solutions through 2026.
Navigating a Softening Market
The E&S property market may be softening, but navigating it still requires care and deep expertise. As new capacity continues to enter the arena, the need for strong wholesale partnerships becomes even more essential to find the right coverage for your clients.
Jencap empowers agents with access to unmatched carrier relationships, exclusive programs, and expert underwriting insight to ensure that your clients stay protected and competitive, even as the market continues to evolve. Ready to structure smarter, more competitive property placements? Contact us to connect with a Jencap specialist.
