State of the Insurance Industry 2026: A Guide for the People Doing the Work

If your inbox and feed is anything like mine ...then you've been bombarded by the various "state of the insurance industry" reports for the coming year and recapping 2025. But these reports are overloaded with corporate hoohah and simply something for individuals to trade factoids at conferences and executives to nod along with in board rooms.

That's not to say these reports aren't valuable. The aggregate data, market trends, and macroeconomic analysis they provide are essential for understanding where the industry is heading. But they're missing something critical: what does all this actually mean for the people doing the work? What should a retail broker in Des Moines, a wholesale underwriter in Atlanta, or a newly minted producer in Phoenix actually do with this information?

So let's talk about the state of the industry at a more granular level, focusing on the individuals navigating these markets daily and what retail brokers, wholesalers, and underwriters can expect in 2026.

The Market Nobody Predicted

The consensus at the start of 2025 was clear: hard market conditions would persist across most lines. Instead, we got something far more interesting and infinitely more complicated.

The property market didn't just soften, it collapsed for quality risks. I'm talking to retail brokers who placed $5 million property schedules last year at +15% who are now getting quotes at -12% from the same carriers. Not cat-exposed coastal stuff. Midwest manufacturing facilities with clean loss histories and proper risk management. The whiplash has been remarkable.

Meanwhile, casualty became exactly what everyone feared. Commercial auto hit its 54th consecutive quarter of increases in Q4 2024. Think about that. If you started your insurance career when commercial auto rates began climbing, you've never experienced a soft market in that line. You literally don't know what declining auto rates look like.

The E&S market crossed $129.8 billion in premium in 2024, capturing over 25% of all commercial insurance. Seven consecutive years of double-digit growth. When I started in this industry, E&S was the market of last resort. Now it's often the market of first choice for anything remotely complex or requiring flexible terms.

What Actually Changed for Brokers on the Ground

The data everyone cites shows E&S growing at 12.3% annually. Here's what that actually means when you're working an account:

That restaurant group with 15 locations you've placed for years? It used to require quotes from three admitted carriers and maybe one E&S backup. In 2025, you're checking eight to twelve markets because the admitted carriers are offering wildly different terms based on which locations they like, the E&S markets are competitive on price for the first time in years, and you're layering coverage across multiple carriers because nobody wants the full exposure.

The property schedule that used to take three days to market now takes two weeks because you're assembling it piece by piece. Location A goes to Carrier X at great terms. Locations B and C need Carrier Y but they won't take D, so that goes to an E&S market. By the time you're done, you've got four policies, different renewal dates, varying deductibles, and a client wondering why their insurance is suddenly so complicated.

This isn't inefficiency. This is the market telling us something fundamental has changed about how risk gets distributed.

The brokerages that figured this out invested heavily in technology to manage multi-carrier placements. They built workflows to track all the moving pieces. They trained their staff to explain the value of fragmented placements rather than apologizing for them. According to industry productivity metrics, top-performing agencies now generate $218,000 in revenue per employee versus substantially lower figures for firms still operating on legacy systems. The spread used to be maybe 20-30%. Now it's double or triple.

The Wholesale Market's Identity Crisis

I spent considerable time in 2025 talking to wholesale brokers, and there's a consistent theme: the traditional value proposition is dying.

For decades, wholesalers succeeded by knowing which E&S carriers would take risks the retail market couldn't or wouldn't place. You called your wholesale contact, described the account, and they'd shop it to markets you didn't have access to. Transaction complete.

That model still exists, but it's no longer differentiated. Retail brokers increasingly have their own E&S carrier relationships. Digital wholesale platforms let them submit directly. The pure market access value has eroded substantially.

The wholesalers who are thriving have become something entirely different. They've built genuine underwriting expertise in specific verticals. They develop proprietary data and analytics. They negotiate binding authority and create program business. They function as de facto underwriting consultants for retail brokers on complex accounts.

Look at the numbers. The MGA/MGU market hit $114.1 billion in U.S. direct premiums in 2024, growing at 16% annually. That's double the rate of traditional broking. The top five MGA groups control just 17.6% of global revenue, meaning there's massive fragmentation and opportunity for specialists.

But here's the uncomfortable part: generalist wholesalers that competed primarily on relationships and market access are getting squeezed. Regional wholesalers with deep expertise in specific industries are consolidating market share. We saw this play out in the M&A data. Eight of the 25 largest broker transactions in history happened in the past 24 months, totaling over $50 billion. Ryan Specialty alone completed seven acquisitions in 2024 adding over $265 million in annualized revenue. The message is clear: specialize or get acquired.

Underwriters Got Better Tools but Worse Information

The technological capability available to underwriters improved dramatically in 2025. AI-enabled underwriting systems can process standard policies in under 48 hours, with some achieving decision times of 12.4 minutes with 99.3% accuracy. Predictive modeling has gotten substantially more sophisticated. Data integration across platforms has improved.

And yet, every underwriter I talk to expresses the same frustration: submission quality has gotten worse, not better.

Submissions arrive incomplete. Risk characteristics aren't properly explained. Loss history lacks context about what the insured actually did to address the claims. The ACORD applications are filled out, sure, but they don't tell the story. There's no narrative about why this particular account is a good risk despite what appears in the loss runs.

This creates a fascinating dynamic. Underwriters with better analytical tools have become more selective, not less. They can rapidly identify well-presented, thoroughly documented risks and price them aggressively. They can also immediately spot inadequate submissions and decline or significantly load pricing without spending time on development.

The spread between how the best and worst submissions are treated has widened considerably. I've seen identical risks, similar loss histories, quoted 40% apart based entirely on how the submission was packaged and presented.

The Casualty Problem Nobody Wants to Talk About

Social inflation added $143 billion in losses in 2023 alone. That's more than global natural catastrophe insured losses that year. Let that sink in. The slow-moving crisis of jury verdicts is now more expensive than hurricanes, wildfires, and earthquakes combined.

Nuclear verdicts topped out at 135 cases totaling $31.3 billion in 2024, up 116% in total value from 2023. The median verdict climbed to $51 million. Five verdicts exceeded $1 billion. These aren't outliers anymore. This is the new normal.

The umbrella market has responded by essentially rationing capacity. Lead umbrella limits that previously ranged from $10-25 million have compressed to $2-5 million maximum. Some carriers won't offer more than $2-3 million. Rates continue climbing 9-10% even for clean accounts, with challenged classes seeing double-digit increases.

Four London excess markets closed in 2024. That's not restructuring or repositioning. That's abandonment of the market.

The downstream effects are profound. If you're a retail broker, you're now assembling ten-carrier towers for accounts that needed two carriers a decade ago. If you're a wholesale broker, you're spending exponentially more time on each placement. If you're an underwriter, you're looking at every general liability risk wondering if this is the account that produces a $50 million verdict that blows through policy limits and triggers bad faith litigation.

Reserve adequacy concerns are mounting. Reinsurers added approximately $6 billion in reserve strengthening for U.S. casualty business in 2024. AM Best estimates commercial auto remains $4-5 billion under-reserved industry-wide. These aren't normal cycle corrections. These are fundamental re-pricings of long-tail liability.

The Workforce Crisis That's Already Here

Half the current insurance workforce retires by 2028. That's not a projection about the distant future. That's 400,000 people leaving in the next 24 months.

I look around industry conferences and the demographics are stark. A quarter of the workforce is over 55. Only 11% of insurance agents are in their twenties. More than 90% of new agents quit within their first year. The talent pipeline isn't just broken, it's basically non-existent for retail production roles.

Here's what this means practically: that veteran underwriter who knows how to assess manufacturing risks from 30 years of experience? They're retiring, and we're replacing them with someone using AI-assisted underwriting tools who has never actually walked a factory floor. That wholesale broker who can place anything because they've built relationships over decades? Gone, and good luck replicating that Rolodex.

The insurance industry has historically solved problems by throwing experienced people at them. That's not going to be an option much longer.

Companies know this. Despite the talent shortage, 55% of insurers plan to expand headcount in 2025. But here's the problem: they're all fishing in the same tiny pond of qualified candidates. Compensation has increased, remote work has become standard (72% of carriers now operate hybrid models), but the fundamental issue remains. Insurance isn't attracting young talent at anywhere near replacement rates.

What 2026 Actually Looks Like

Based on everything I'm seeing, here's what's coming:

Property rates continue softening for favorable risks, potentially declining 5-15%. If you're a broker with a book of clean property business, expect significant compression on renewals. This isn't temporary. This is overcapacity meeting improved catastrophe modeling meeting better loss experience.

Casualty remains firmly in hard market territory. Commercial auto continues up 5-10%. Umbrella and excess liability up 10-15% for at-risk accounts. General liability gets increasingly difficult to place at reasonable terms for any business with meaningful public exposure. This pressure persists into 2027 and possibly beyond.

The E&S market continues capturing market share, potentially reaching 30% of commercial lines by year-end 2026. This isn't about difficult risks anymore. This is about standard accounts that need flexibility the admitted market won't provide.

Technology adoption becomes genuinely non-negotiable. The productivity gap between tech-enabled and traditional operations is too large. The client experience differential is too noticeable. Brokerages still running on spreadsheets and email will find themselves unable to compete for sophisticated clients.

M&A activity remains robust. PwC reports 93% of recent deal value came from megadeals. Consolidation continues across both retail and wholesale. If you're a mid-sized independent brokerage without a clear specialty or exit strategy, 2026 is probably the year you start having serious conversations about what comes next.

The Takeaways:

For Retail Brokers Entering the Industry

You're entering at a moment of maximum complexity and maximum opportunity. The brokers who succeed in the next five years won't be relationship managers. They'll be risk advisors who can navigate fragmented markets, assemble complex multi-carrier placements, and explain why this complexity actually benefits the client.

Invest immediately in understanding technology. Not just your agency management system, but comparative raters, digital wholesale platforms, AI-assisted underwriting tools, and data analytics. The productivity gap between tech-proficient and tech-resistant brokers will determine career trajectories.

Pick a specialty early. The generalist retail broker competing on service and relationships faces an increasingly difficult path. Find an industry vertical or coverage specialty where you can develop genuine expertise. Manufacturing risks, healthcare, construction, cyber, environmental—pick something and become the person people call for that specific exposure.

Build wholesale relationships strategically. Don't just know wholesalers. Know which specific wholesalers excel at which specific risks. Understand the difference between a market access wholesaler and a true program underwriter. Your wholesale partners will increasingly determine what you can place and at what terms.

Learn to present risk, not just submit applications. The difference between a well-packaged submission and a basic ACORD application is often 30-40% in pricing. Develop the skill of telling the risk's story. Explain the loss history context. Describe what risk management improvements have been implemented. Make the underwriter's job easy.

For Experienced Retail Brokers

If you've been in the business 10+ years, your experience navigating traditional market cycles is both your greatest asset and your biggest blind spot. The market dynamics driving 2026 aren't cyclical, they're structural.

Audit your book aggressively. Property accounts with clean loss histories are getting shopped by your clients because they're seeing their neighbor get 15% decreases while you're delivering flat renewals. Don't wait for the RFP. Proactively remarket this business now.

Casualty accounts need urgent attention from the opposite perspective. If you have clients with general liability or commercial auto approaching renewal and you haven't started marketing 90+ days out, you're behind. The market has fundamentally repriced this business. Better to manage client expectations early than scramble at renewal.

Technology investment isn't optional anymore. That system you've been using for 15 years because "it works fine"? It's costing you 30-40% in productivity compared to modern platforms. The math doesn't work. Either your firm invests in technology or you start exploring firms that have.

Develop a succession plan that accounts for market realities. If you're planning to sell your book in the next 3-5 years, understand that buyers are paying premiums for specialty expertise, sophisticated books, and tech-enabled operations. Generic commercial books written on legacy systems are facing significant valuation compression.

Consider the specialist path. If you're currently a generalist, 2026 may be the year to evolve. Pick 2-3 industries or coverage types where you already have concentration and double down. Become the known expert rather than the broker who does everything.

For Wholesale Brokers Entering the Industry

You're joining the fastest-growing segment of insurance distribution at a moment when the industry's best opportunities lie in wholesale and specialty markets. But success requires a different mindset than traditional retail broking.

Become a genuine underwriting expert, not a market shopper. The wholesale brokers who thrive in this environment know their specific risks better than retail brokers and almost as well as carrier underwriters. Pick a niche and study it obsessively. Construction defect. Environmental exposures. Cyber. Cannabis. Whatever interests you—but actually become the expert.

Build carrier relationships strategically. Don't try to know every market. Instead, develop deep relationships with 3-5 key carriers in your specialty. Understand their specific appetites, their underwriting philosophies, their internal approval processes. Become the person they call when they're considering a difficult risk.

Learn program business and binding authority. The highest-value wholesale functions aren't transaction-based—they're program-based. Understanding how to structure an MGA program, negotiate binding authority, or create a specialty program is what separates $100K producers from $500K producers.

Understand the retail broker's actual problems. Retail brokers don't just need markets. They need speed, certainty, and education. The wholesaler who can turn a quote in 24 hours, explain coverage nuances clearly, and help the retail broker present the placement to their client is worth 10x the wholesaler who just returns a quote.

Don't underestimate technology. Wholesale operations increasingly run on specialized platforms. Understanding policy administration systems, comparative rating tools, and submission management platforms will differentiate you from competitors still operating by email and Excel.

For Experienced Wholesale Brokers

The business model you built your career on is evolving rapidly. Market access alone no longer creates sustainable value. The successful wholesale brokers of 2026-2030 will be fundamentally different from their predecessors.

Evaluate your specialization honestly. If you're a generalist wholesaler competing primarily on relationships and broad market access, you're facing sustained pressure. The data is unambiguous: specialist wholesalers are capturing share while generalists are being squeezed. 2026 may be the year to narrow your focus or align with a larger platform that can provide specialty resources.

Consider binding authority aggressively. Carriers increasingly want to partner with wholesalers who can underwrite risks directly. If you have genuine expertise in a vertical, pursue binding authority arrangements. This transforms your economics from commission-based to underwriting profit-based.

Watch the MGA consolidation wave. With $114 billion in premiums and 16% annual growth, the MGA sector is attracting massive capital. Ryan Specialty alone completed seven acquisitions in 2024. If you're running a successful specialty wholesale operation, you're likely receiving acquisition inquiries. Understanding your options and timing matters enormously for outcome.

Build beyond individual relationships. The veteran wholesale broker whose value is their personal Rolodex faces a succession problem. How do you transfer relationships built over 25 years? The answer increasingly is you don't—you build systems and specialty expertise that transcend individual relationships.

Invest in retail broker education. The most successful wholesalers in 2026 won't just place business—they'll educate retail partners on market dynamics, coverage trends, and risk management. Become a genuine resource and you'll be the first call, not the last resort.

For Underwriters Entering the Industry

You're joining an industry facing an actuarial crisis: half the underwriting workforce retires by 2028 and we're not replacing them fast enough. This creates enormous opportunity for those who develop genuine underwriting judgment.

Learn from experienced underwriters while they're still around. The veteran underwriter sitting two desks over who can assess a manufacturing risk in 15 minutes based on three decades of experience? That person retires in 18 months. Extract every bit of knowledge you can. Ask questions. Request to co-underwrite accounts. That institutional knowledge is walking out the door and AI won't replace it.

Master the technology, but don't let it master you. AI-assisted underwriting, predictive modeling, and automated decisioning are powerful tools. But they're tools. The underwriters who succeed will combine technological capability with genuine judgment. Understand what the models tell you and, just as importantly, when to disregard them.

Develop the skill of risk storytelling backwards. You'll spend significant time working with inadequate submissions. Develop the ability to extract the real risk story from incomplete information. Call the broker. Ask clarifying questions. Site visits for complex risks aren't old-fashioned—they're how you develop judgment that algorithms can't replicate.

Specialize early, but broadly first. Spend your first 2-3 years understanding multiple lines. Then pick a specialty. Environmental. Cyber. D&O. Construction. The specialist underwriters command higher compensation and have more career optionality than generalists.

Build broker relationships proactively. Underwriters who are responsive, educational, and clear about their appetite get better submissions. The broker who knows you'll turn quotes quickly and provide detailed feedback on declines will send you their best business. This compounds over a career.

For Experienced Underwriters

If you've been underwriting for 10+ years, your judgment and institutional knowledge are increasingly rare and valuable. But the market is changing faster than at any point in your career.

Casualty underwriters need to fundamentally reassess risk pricing. If you're still using the same base rates and loss cost multipliers you used in 2020, you're mispricing accounts. Social inflation isn't a temporary phenomenon—it's a structural repricing of tort liability. Your portfolio from five years ago would be unprofitable at today's loss costs.

Property underwriters should embrace the soft market with discipline. The temptation is to chase volume as rates decline. The smarter play is maintaining underwriting standards while rates compress. The accounts you write at -10% in 2026 need to remain profitable through the next hard market cycle. That means selectivity matters more, not less.

Technology should enhance your judgment, not replace it. You've built underwriting instincts over years of seeing how risks perform. Don't abandon that when the AI model recommends a different decision. The best underwriters in 2026 will combine algorithmic precision with human judgment.

Mentor aggressively. You're going to retire eventually—many of you sooner than you think. The industry desperately needs to transfer your knowledge to the next generation. Make time to train junior underwriters. Document your decision-making frameworks. Your legacy will be the underwriters you develop, not just the policies you write.

Consider the program underwriting path. Your expertise in a specific coverage or industry could form the basis for an MGA or program. This shifts your role from individual policy underwriting to portfolio management and program design. It's more entrepreneurial, higher risk, but potentially far more lucrative.

For Everyone in Distribution and Underwriting

Regardless of role or experience level, several universal realities will define success in 2026 and beyond:

The social inflation crisis in casualty isn't going away. This will be the defining challenge of the next 3-5 years. Every general liability policy you write, every umbrella you place, every commercial auto account you touch exists in an environment where median verdicts have doubled in four years. Price accordingly. Structure coverage defensively. Educate clients on the exposure.

Market fragmentation is permanent. The days of single-carrier, simple placements are over for complex accounts. Whether you're a broker assembling a tower, a wholesaler finding markets, or an underwriter deciding how much of a risk to retain, fragmentation is the new normal. Build systems and skills to manage it.

Technology adoption determines survival. The productivity gap between tech-enabled and traditional operations has become insurmountable. If your firm isn't investing in modern platforms, you're competing against competitors who process accounts 2-3x faster at higher accuracy. That math catches up eventually.

Specialization creates disproportionate value. The generalist serving all clients in all lines faces commoditization pressure. The specialist who genuinely understands manufacturing risks, or healthcare facilities, or cyber exposures, or construction operations commands premium pricing, better retention, and more career options.

The talent crisis is everyone's problem. If you're experienced, you have an obligation to develop the next generation. If you're early career, you have extraordinary opportunities because supply is so constrained. If you're mid-career, your decision to stay in or exit the industry will affect market dynamics for a decade.

This is the conversation worth having as we move through 2026. Not the surface-level statistics that make for good conference presentations, but the fundamental changes in how business gets done and what skills and capabilities drive success. The annual reports provide the data. This provides the implications for the people actually doing the work.

Fabio Faschi is an Insurance leader, National Producer, Board Member of the Young Risk Professionals New York City chapter and Committee Chair at RISE with over a decade of experience in the insurance industry. He has built and scaled over a dozen national brokerages and SaaS-driven insurance platforms. Fabio's expertise has been featured in publications like Forbes, Consumer Affairs, Realtor.com, Apartment Therapy, SFGATE, Bankrate, and Lifehacker. For more information, visit his website: fabiofaschi.com.