| Trend | Range | |
|---|---|---|
| Property | ||
| Tier 1* |
|
–15% to –20% |
| Tier 2** |
|
–5% to –10% |
| Tier 3*** |
|
Flat to –5% |
| Liability**** | ||
| General liability |
|
Flat to +5% |
| Auto |
|
+7% to +15% |
| Workers compensation |
|
Flat to +2% |
| Lead umbrella |
|
+5% to +15% |
| Excess liability |
|
Flat to 10% |
*Tier 1: Well-engineered and operated risks with clean loss history
**Tier 2: Risks with clean loss history, but lower premium income/smaller insurer panels
***Tier 3: Challenging risks with significant natural catastrophe exposure, history of losses
**** Pertains to upstream/midstream/downstream/chemicals/mining; doesn’t include oilfield services
Note: While market appetite for refining risks remains strong, renewal results in the refining sector may not reach the reduction peaks indicated in the above chart due to concerns resulting from downstream industry losses in recent years, driven disproportionately by refining sector clients.
Key takeaway
Property:
The midstream/downstream property markets enter H1 2026 in a continued softening cycle. Initial attempts at underwriting discipline can be expected, but this will largely be overpowered by competition for market share in the face of another year of growth targets for many insurers. This fierce competition for premium volume in 2026 follows another unprofitable underwriting year in the segment driven largely by losses in the refining sector. However, availability of capacity remains robust, including new capacity in the market with no clear signs of contraction.
Liability:
Despite underlying concerns in the alarming uptick in litigated auto and workplace injury claims frequency, capacity (particularly in excess liability) remains robust, with an increase in capacity and appetite now available from the London marketplace, offsetting the decrease in domestic excess liability capacity.
The first quarter of 2026 witnessed a significant shift in the global geopolitical landscape, ushering in a new era of uncertainty in the Middle East and Latin America. For organizations with foreign operations, travel exposure, and those impacted by international supply chains, a renewed focus on crisis risk management is imperative.
Property
- 2026 kicked off much like 2025 with another refinery fire in Spain, followed by a notable fire at a large refinery in Port Arthur, TX
- While the refining sector does contribute a large sum of premium into the market, its proportion of the losses is disproportionately contributing to the lack of profitability in recent years
- No perfect correlation exists between most of the refining events of the last several years, but a human error-led trend does appear to be forming as more losses stack up
- Due to the nature of the risk, severity remains a key driver, but the frequency of severe events appears to be increasing with time
- As the lack of profitability is driven by severity and not attritional losses, it's likely that market corrections will come via tightening of capacity through line size reduction or pricing rather than retention levels should a correction in refining occur
- Willis has partnered with Canopius and Markel to lead two new Willis exclusive facilities, Gemini and Mercury alongside Willis’ existing facility Client Edge, to help drive remarkable results for clients
- These facilities allow Willis to further elevate competition for risks
- Increases in competition with user-friendly facility capacity provide a significant point of leverage for Willis
- In addition to these exciting Willis facilities, new capacity is still entering the market alongside interest from many in the market, to increase lines to support premium income in a soft market
- New capacity entering the market includes a previously power and renewables MGA in London now looking to expand into midstream risks and a large Lloyd’s syndicate who has recently hired a well-known downstream underwriter to start up a new midstream/downstream portfolio
- Despite some of the challenges presented in this market update, the supply side of the equation remains in the favor of buyers, and until the supply side contracts, the market is likely to remain in a soft cycle outside of small adjustments driven by some pockets of underwriter influence and account-by-account differentiation
- Insurers see significant opportunities in construction for data center build-out, including the data centers themselves, but also supporting infrastructure like conventional power generation and BESS as well as pipelines and compression to provide gas for these facilities
- These construction opportunities come at an ideal time as the operational market struggles to hold rates and premiums and top-line growth expectations continue for many insurers
- Several markets are now aggressively pursuing construction opportunities with current clients to supplement their premium income and expand client services
- There's increased interest in inclusion of first-year operations in conjunction with upcoming power projects associated with the data center buildouts
- The pursuit of these construction opportunities can be utilized by Willis as differentiators between insurers and leveraged to drive results on operational programs as insurers look to cross-sell and deepen their relationships with clients across both lines
- Several markets are seeking to round out construction underwriting capabilities, which has started a market merry-go-round of talent to fill all the now highly competitive environment for construction underwriters
- The first quarter of 2026 has brought significant global disruption, including military activity in some areas of the world, which has potentially transformative impacts on the oil and gas space
- Insurers are acutely focused on trying to understand what these global events may mean for their clients across multiple lines of business with a keen eye on property and the potential impact on the client's business and global supply chain
- The disruption in Venezuela has potential to open significant supply of heavy crude, leading to questions from insurers around crude slate and global pricing or feedstock and refined products, while also leading to concerns around potential client investments in a historically volatile area of the world
- The ongoing conflict in Iran and the closing of the Strait of Hormuz has created severe volatility in the pricing for crude and many other commodities. The conflict has also impacted oil and gas assets in neighboring countries, creating concerns about global processing capabilities and long-term pricing volatility
- Clients need to be prepared to provide a thorough explanation of the impacts of these two events on their business, what they can do to reduce the volatility and what this may mean for their businesses in both the short and long term
- The events in the Middle East and in Venezuela have created increased volatility in a space where insurers already had concerns about the accuracy of exposure data as it relates to business interruption
- Downstream/midstream losses of the last several years have highlighted the opacity of client-reported business interruption values and in some cases, have evidenced a misunderstanding of the exposure
- With BI losses driving a large proportion of many losses in recent years, some reaching far above reported values with a notable few being impacted by volatility clause caps, insurers continue to focus on understanding and properly pricing for BI exposure and volatility
- Evidencing a strong understanding of the calculation methodology and robust exposure review and reporting structure will be key to a successful renewal in 2026 and beyond
- Clients unable to articulate their exposure and reporting methodology may be faced with limitations and restrictions as well as potentially less advantageous renewal pricing due to lack of underwriter confidence
- For clients with BI volatility clauses like the LMA 5515, regimented check-ins with internal finance resources should be considered, potentially including BI value redeclaration to insurers should significant swings in exposure take place
- Willis' brokers and its robust team of forensic accountants can provide guidance on BI reporting and design a structure that will yield the best results
Liability
- Despite ten consecutive years of rate increases for primary Auto Liability losses continue to outpace rate increases each year
- Challenging jurisdictions in Texas include Harris County, Midland County and Louisiana remain problematic as well. Clients with operations in these areas will face increased scrutiny as larger awards and settlements are impacting auto liability pricing and lead umbrella limits and pricing can be impacted by clients operating large fleets in these areas
- While the auto-rate increases are forecast to lessen in comparison to prior years, carriers are still seeking rate increases on all accounts in all sectors
- The oilfield services segment continues to see the largest uptick in general liability/excess liability claims due to an increase in severity in both judgments and settlements for workplace injury lawsuits
- “Action-over” lawsuits appear to be increasing from both a frequency standpoint and settlements continue to be paid by Lead Umbrella policies, impacting availability limits from certain carriers
- The increase in the frequency of large demands/settlements for injuries to hired third-party contractors continues to outpace limits required in master service agreements
- Despite contractual protections such as “knock for knock” indemnity, the concerning increase in settlements for serious injuries or fatalities continues to outpace the limits required by hiring companies, exposing the hiring company’s insurance program to claims that historically were protected via robust indemnity agreements
- This is exacerbated by Anti-Indemnity statutes in states such as Louisiana, Texas and New Mexico
- Excess capacity in many segments has decreased once again domestically, while London capacity has increased in the first $100 million of programs
- Domestic pricing pressure and rate increases are being tempered by this uptick in capacity and underwriting appetite by the London marketplace
- It’s critical that clients highlight auto-safety programs/driver hiring criteria, contractor limits sought and direct communication with potential liability markets during the marketing process
- Domestic markets, many of whom are still seeking high-single digit rate increases, are feeling pressure from new global capacity, and we predict that this will lead to more stable pricing in 2026 for insureds with clean loss histories
- Certain segments, such as onshore and offshore exploration and production companies, should expect rate decreases in the excess liability marketplace
Disclaimer
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
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