HOW TO DRIVE GROWTH IN A SOFTENING RATE ENVIRONMENT written by Keith Captain, MarshBerry
Insurance markets move in cycles, much like the seasons. For the past several years, it’ s been in a hard market – a period where premiums rise and underwriting gets tighter. Recently, though, the climate has started to shift. Premium increases are slowing, and margins are thinning. Commercial lines premiums in Q4 2025 rose by an average of just 0.2 %, down from 1.6 % in Q3 2025.1 Even commercial auto, which previously had 58 straight quarters of increases, saw premiums decrease at the end of 2025. As the market shifts, agencies must consider new strategies to help increase organic growth in an evolving climate. After largely focusing on business retention, agents who shift from a retention mindset to a growth mindset will win.
MARKET CONDITIONS HAVE SHIFTED
It is estimated that the insurance brokerage industry has been in a hard market for the last 6-8 years. MarshBerry defines a hard market as a period where product premium rates increase by over 5 % for two or more years. Experientially, a hard market period is characterized by increased premium rates, restricted coverage, and lower capacity – caused by an increase in demand and decrease in supply of policies.
Market cycles are often subjective, and they rarely reflect conditions across all insurance lines. For example, while commercial property lines are clearly softening, casualty lines pricing continues to rise. Auto insurance rates are expected to rise in 2026, just at a slower pace. Overall, rate increases in commercial lines have been declining for roughly five years, from approximately 7 % to roughly 3 % by the end of 2025.
Rate increases in personal lines slowed on and off over the past five years, but when you add in inflation and exposure increases, some customers have seen significant double digits. In 2024, personal line rate increases hovered between 4-6 %. These rate increases are expected to be steady or inflationary in 2026, depending on the lines and location of the customer. Some major personal auto insurance carriers are
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