Specialty insurance market rates declined in 2025 and at the Jan. 1, 2026, renewals, with the pace of softening outstripping forecasts from both brokers and insurers, according to WTW's latest Specialty Insurance Marketplace Survey (SIMS).

Data from Jan. 1, 2026, renewals and new business indicates that the trend has continued into the current year, with a 10-point decline in the insurance rate index taking overall pricing back to 2020 levels.

Based on the SIMS insurance rate index, expected performance, net of exposure trends, in 2025, effectively unwound the rate-strengthening gains of recent years back to levels last seen in 2021. It was also the first year since 2018 in which rate adequacy for new business fell below that for renewal business, pointing to increased competition for fresh accounts.

Rates fall across three‑quarters of key classes

For Jan. 1, 2026, renewals, 75% of the 42 material classes tracked by SIMS showed rate decreases on a gross-of-claims-trend basis, compared with 30% of classes in 2024. The results also showed aggregate specialty insurance rates down 5% gross of claims trend and 8% net of claims trend, after adjusting for claims cost inflation beyond what is captured in simple price-change metrics.

SIMS also showed specialty markets achieving roughly a 45% cumulative rate increase between 2017 and the market peak in 2023, with around half of that uplift eroded over the past two years.

Property and energy lead softening; liability diverges

The most pronounced rate decreases in SIMS are in property and energy, followed by marine, financial institutions and professional liability lines.

These shifts are linked to relatively benign catastrophe experience and atypical frequency and severity patterns in recent underwriting years, even as geopolitical tensions, inflationary pressures and supply‑chain issues remain elevated, according to the survey.

WTW said it does not view current conditions as sustainable in the long term, although the timing and nature of any correction remain uncertain.

A softening phase

The SIMS results confirm that the market is now in a softening phase across many classes, with technical margins being squeezed as earned rate increases from the hard-market years run off. The fact that net‑of‑claims‑trend rates are falling faster than headline prices suggests that some underwriters may be releasing rate at a time when loss‑cost inflation remains embedded, particularly in liability‑heavy portfolios.

In property and energy, where reinsurance capacity has been returning following the dislocation of 2022 to 2023, competitive pressure is clearly feeding through to direct and facultative pricing.

At the same time, casualty and professional lines continue to wrestle with long‑tail uncertainty, making reserve adequacy and claims‑trend monitoring critical as reported rate changes turn negative in real terms.

The survey captured around US$250 billion of gross written premium over a 10-year cycle, including US$45 billion in 2025, and covered specialty insurers operating across the London, Bermuda and US excess and surplus (E&S) markets