Lockton, a privately held independent insurance brokerage, reports that the U.S. commercial insurance market will remain largely stable in 2025, although economic uncertainty is expected to affect conditions in 2026.
The latest Lockton market update provides commercial insurance buyers with detailed analysis on property, workers’ compensation, liability, directors and officers liability, employment practices liability, loyalty/criminal, fiduciary liability and cyber insurance, while also highlighting systemic cyber risks and the U.S. political environment.
“Insurers, businesses and individuals are facing uncertainty as we begin 2025,” commented Vince Gaffigan, Director of Market Engagement, Lockton US. “While much has changed over the past year, the industry finds itself on a similar trajectory heading into 2026. Success in the new year starts with early engagement with brokers and proactive refresh strategies that will allow organizations to optimize their insurance programs and gain a competitive advantage in an ever-changing market.”
Lockton said commercial insurance conditions were generally favorable for most lines, although third-party liability remained an area of challenge. Lockton noted that the industry is well capitalized, insurers’ financial positions have strengthened, reinsurance costs have declined and the housing market is recovering faster than expected.
Greg Spore, head of U.S. specialty and execution risk markets at Lockton, added: “All eyes are on new investments in technology, artificial intelligence, advanced analytics and underwriting automation. Lockton’s market update provides insurance buyers with insights to navigate 2026 with confidence and strategy.”
Lockton’s analysis shows property and casualty insurers delivered strong underwriting results, with commercial lines performing well and personal lines improving as rate adjustments took effect. Nonetheless, Lockton also noted ongoing concerns about the adequacy of interest rates, new currency yields, slowing income growth and the long-term sustainability of current market conditions.
Lockton said economic uncertainty continues to define the risk environment. Rising inflation and unemployment, combined with slightly lower interest rates, will create mixed signals for insurers and commercial insurance buyers in 2026. In response, Lockton reports, insurers are focusing on rigorous underwriting, pricing, reserving and portfolio management across lines.
Lockton reports that the property and casualty insurance industry remains competitive, with insurers actively protecting existing portfolios while pursuing new business opportunities. Workers’ compensation coverage remains stable, although it continues to be affected by regulatory changes and broader economic pressures.
In liability insurance, growth is measured and insurers remain cautious due to social inflation, reserve considerations and emerging risks. Lockton observed that public companies’ director and officer liability rates have largely stabilized, while private companies and nonprofits operating in highly competitive markets are showing signs of gradually firming up.
Employment practices liability premiums were largely unchanged as insurers closely monitor regulatory developments and claims trends. Fidelity and crime underwriting rates remain stable, with underwriters continuing to apply a disciplined approach to social engineering risks. While insurance companies remain wary of lawsuits surrounding excessive fees, fiduciary duties remain steady. Cyber insurance continues to favor buyers, but Lockton stressed that insurers are paying close attention to systemic risks and the changing regulatory environment.
Lockton advises organizations to take a proactive approach to managing risk and developing insurance strategies. Engaging with brokers early, allocating risk capital strategically, planning for multiple scenarios, and approaching renewals thoughtfully can help businesses strengthen coverage and secure a competitive advantage in a dynamic market.
