Specialty Insurance Rates Retreat to 2020 Levels as Market Softens Faster Than Expected: WTW Survey

The specialty insurance market is softening faster than the industry anticipated, according to WTW's closely watched Specialty Insurance Marketplace Survey (SIMS), which provides one of the most data-rich views of pricing dynamics across the London, Bermuda, and US excess and surplus (E&S) markets. The survey reflects approximately $250 billion of gross written premium over a ten-year cycle, including $45 billion in 2025, and is built exclusively on data contributed directly by participating insurers rather than broker estimates.

The headline finding is striking: data from the January 1, 2026 renewals and new business shows a 10-point decline in the SIMS insurance rate index, taking overall pricing back to levels last seen in 2020. The pace of softening has outstripped forecasts from both brokers and insurers. To put the cycle in perspective, the specialty market achieved an approximate 45% cumulative rate increase between 2017 and the market peak in 2023 — and roughly half of that hard-won increase has now been eroded over just the past two years. Notably, 2025 was the first year since 2018 in which rate adequacy for new business was lower than for renewal business, a classic signal of intensifying competition.

The breadth of the softening is significant. For the January 2026 renewals, 75% of the 42 material classes tracked showed rate decreases on a gross-of-claims-trend basis, compared with just 30% of classes a year earlier. The most pronounced decreases are in property and energy lines, followed by marine, financial institutions, and professional liability — reflecting benign catastrophe experience in 2025 and ample available capacity, partially offset by elevated geopolitical tensions tied to the Iran conflict.

However, the market is not softening uniformly. WTW found that general liability and medical malpractice are behaving counter-cyclically to the broader market. 'Substantial concerns relate to social inflation, nuclear jury verdicts and the expansion of litigation funding in this market,' the firm noted, adding that while it does not believe this trend is sustainable, the near-term trajectory remains uncertain. These casualty lines continue to see pressure even as property and specialty rates fall — a divergence that complicates portfolio management for diversified carriers.

WTW publishes SIMS twice yearly, with the next update based on first-half 2026 results and the July renewals. The survey's inclusion of claims-trend data allows for a more complete picture of expected profitability movements than rate data alone, helping carriers validate business plans and assess rate adequacy across both new and renewal business.