Insurers plan for leaner 2026 as pricing momentum eases

The property and casualty segment is expected to see a moderation in growth.

Insurers worldwide are preparing for a more challenging operating environment in 2026, with slower premium growth, tighter margins, and mounting risks from trade tensions, extreme weather, and regulatory change, Deloitte said in a report.

The property and casualty (P&C) segment is expected to see a moderation in growth after several years of strong pricing. 

Analysts forecast global premium expansion to ease through 2026 amidst rising competition and cost pressures. 

Emerging markets will likely slow due to weaker economic momentum in China, which accounts for about half of all emerging market premiums.

In Europe, markets such as France, Germany, and the UK are expected to post stronger returns, with sector return on equity rising from 9.1% in 2024 to 11.6% in 2025. 

In the US, underwriting performance reached its strongest level in more than a decade in 2024 but is expected to soften, with the combined ratio increasing from 97.2% in 2024 to 99% by 2026.

Higher tariffs and supply chain disruptions are raising claims costs in motor and property insurance, pushing up premiums and eroding margins. 

Marine and aviation insurers are also facing greater exposure from rerouted shipping lanes and port congestion. 

Investment yields are projected to improve slightly, from 3.9% in 2024 to 4.2% in 2026, though potential rate cuts could limit gains.

Weather-related losses remain a significant drag, widening the global protection gap to around $183b. 

Rising litigation costs and social inflation continue to pressure liability insurers. 

To manage these risks, more carriers are expected to blend traditional reinsurance with capital market instruments such as catastrophe bonds.

In the life and annuity (L&A) sector, growth is slowing in advanced markets but remains strong in emerging economies. 

Despite progress, many carriers still struggle with legacy systems and data quality. 

Cybersecurity and workforce transformation remain top priorities, as firms balance automation with the need for skilled professionals.

Heading into 2026, insurers are expected to focus on operational efficiency, technology integration, and customer-centric innovation to stay resilient amidst volatile markets and growing risk complexity.