Insurance Daily News

US Property Softening Levels Off, Casualty Diverges

The Baldwin Group’s third-quarter Market Pulse report indicates that the pace of commercial property price reductions in the United States has halted its acceleration. Property pricing fell 8.0% in Q3, virtually unchanged from the 8.1% decline recorded in Q2, marking the sixth straight quarter of declines but the first where the drop did not deepen. Leslie Nylund, national managing director of broking and insurance company partnerships at Baldwin, noted that the market still offers real opportunity for buyers who present current valuations and strong loss-control documentation.

Casualty lines are moving on a different trajectory. Primary casualty pricing continues to slow: commercial auto rates rose 2.9% in Q3, down from 4.5% in Q2 and 5.7% in Q1, the lowest quarterly reading since Baldwin’s index began in Q3 2021. General liability increased 3.5%, the third consecutive quarterly slowdown from a peak of 9.3% in Q4 2025. By contrast, excess lines are firming; umbrella pricing rose 5.6% in Q3, up from 5.0% in Q2, though still below the 8.2% recorded in Q1.

Other casualty segments showed mixed signals. Workers’ compensation pricing was effectively flat, slipping 0.1% after a 1.0% decline in Q1, suggesting the floor may have been reached. Cyber rates climbed 2.0%, the highest reading since early 2023, while private management liability rose 3.1% after a 0.9% increase. Public company directors and officers (D&O) pricing fell 1.8%, matching the prior quarter’s decline.

Baldwin expects property softening to continue into Q4, with late-season storms identified as the primary risk. For brokers, the leveling of property cuts implies that the largest reductions may already be behind them, and clients who delayed limit restorations or broader terms could find competitive renewal opportunities. In casualty, the divergence between primary and excess pricing means total program costs may not decline as much as primary rate trends suggest. Clean, well-documented accounts may benefit from competition, while high-hazard, litigation-exposed risks should anticipate limited relief. Tort reform is unlikely to affect pricing before 2027, and the January 1 casualty reinsurance renewals will be a key indicator for excess pricing. The rise in cyber pricing also signals a potential end to the soft market for clients with weaker security controls.

Why it matters

Understanding the split between stabilizing property rates and diverging casualty trends helps insurers and brokers plan renewal strategies and risk pricing.

FAQ

What was the percentage change in commercial property pricing in Q3?
Commercial property pricing fell 8.0% in the third quarter.

How did commercial auto pricing change in Q3 compared to Q2?
Commercial auto pricing rose 2.9% in Q3, down from a 4.5% increase in Q2.

What trend did umbrella pricing show in Q3?
Umbrella pricing rose 5.6% in Q3, up from 5.0% in Q2.

What is Baldwin’s outlook for property pricing in Q4?
Baldwin expects property to keep softening into the fourth quarter, with late-season storms as the main risk.

Source: Insurance Business America. See the original source for full details.