By Josh Recamara
Premium renewal rates across most US commercial lines of business edged lower in May 2026, compared with the previous month, while commercial property moves in the opposite direction, according to the latest Ivans Index data.
Workers' compensation continued its extended run of year-over-year rate decreases, remaining the only major commercial line to record negative renewal rate change.
The May data arrives as the US commercial insurance market undergoes one of its most significant structural transitions in years. The Council of Insurance Agents and Brokers' Commercial P&C Market Index reported that average premiums across all account sizes fell 1.2% in Q1 2026, ending a 33-quarter streak of premium increases and signaling the clearest shift yet away from the hard market conditions that dominated much of the early 2020s.
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The hard market phase that began around 2019 has clearly rolled over for many property and specialty lines, with competitive pressure, additional capacity and improved reinsurance terms all contributing to rate softening, particularly for well-protected, non-catastrophe-exposed risks.
Despite the broad softening, conditions remain uneven. One senior market executive has characterized the current environment as "elevated volatility," noting that competition is becoming increasingly segmented across lines and risk profiles.
Commercial auto came in at 4.96% in May, down from 5.24% in April, continuing a gradual moderation in a line that has remained persistently above 4% year over year. In 2024, general liability and commercial auto nuclear verdicts rose 52%, while total awards more than doubled, with auto liability rate increases forecast to run between 7% and 15% into 2026, according to Aon data.
Business owner's policy stood at 6.07% in May, easing from 6.43% in April. General liability came in at 5.28%, down from 5.70% the previous month. Despite the month-over-month moderation, structural pressures remain significant. The number of nuclear verdicts, defined as jury awards exceeding $10 million, more than quadrupled between 2020 and 2024, while the median value of those verdicts more than doubled, with more than 130 recorded in 2024 alone, a 50% increase on the previous year.
US insurers also added $16 billion to prior-year liability reserves in 2024 as a result of social inflation, with adverse reserve development of $62 billion for commercial liability lines over the past decade.
Meanwhile, Umbrella remained the highest-rate line in the index at 8.01% in May, down from 8.27% in April. Capacity for limits above $25 million remains constrained, driving more placements into the excess and surplus lines market, while carriers are increasingly requiring underlying auto liability limits of between $500,000 and $1 million before writing umbrella cover.
Commercial property was the standout exception in May, rising to 6.71% from 6.24% in April.
The line averaged 6.83% across Q1 2026, down significantly from 8.01% in Q4 2025, suggesting the May uptick comes from a lower base than recent peaks. The month-over-month increase reflects ongoing sensitivity to catastrophe exposure and replacement cost pressures.
Global insured catastrophe losses reached approximately $108 billion in 2025, marking another year above the threshold that insurers now regard as the baseline for annual loss activity, with US property insurance premiums projected to rise 8.2% in 2026, according to the report.
Meanwhile, workers' compensation came in at -1.31% in May, up marginally from -1.35% in April, extending its run as the only major commercial line to record a year-over-year rate decrease. Workers' compensation has been consistently profitable for carriers, with the net combined loss ratio for 2023 and 2024 sitting at 86%.
That profitability, however, may be under threat. The market is entering a pivotal period shaped by rising medical costs, cumulative trauma litigation, and concerns over reserve adequacy, with California's combined ratio hitting 127% in 2024, its highest in more than two decades. Allowed medical cost per claimant rose 9.5% from 2022 to 2025, driven by increased utilization of services, with analysts warning the line could face more meaningful pressure in late 2026 and into 2027.
"The commercial insurance market remains firm overall, though renewal trends suggest it is gradually moving off the peak conditions of recent years," said Kathy Hrach, senior vice president of product management at Ivans. "As carriers balance growth objectives with pressure from both primary and secondary loss exposure, the Ivans Index will serve as a key gauge for how the industry navigates broader market dynamics in 2026."
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