Specialty Insurance Rates Soften Faster Than Expected, Retreating to 2020 Levels: WTW Survey

The specialty insurance market — covering high-volatility, complex risks underwritten across the London, Bermuda, and US excess and surplus (E&S) markets — has entered a pronounced softening phase, with rates falling faster than either brokers or insurers had forecast, according to WTW's latest Specialty Insurance Marketplace Survey (SIMS), published May 6, 2026.

The headline finding is striking: a 10-point decline in the SIMS insurance rate index has taken overall specialty pricing back to levels last seen in 2020. This represents a rapid reversal of the hard-market conditions that defined the sector for years. Between 2017 and the market peak in 2023, the specialty market achieved a cumulative rate increase of approximately 45% — and around half of that increase has now been eroded over just the past two years. WTW noted that 2025 was the first year since 2018 in which rate adequacy for new business was actually lower than for renewal business, a classic signal of intensifying competition for growth.

The breadth of the softening is notable. During the January 2026 renewals, 75% of the 42 material classes tracked by the survey showed rate decreases on a gross-of-claims-trend basis — a dramatic increase from just 30% of classes in 2024. The most pronounced rate decreases are concentrated in property and energy, followed by marine, financial institutions, and professional liability, reflecting relatively benign catastrophe experience and atypical frequency and severity patterns, even as geopolitical tensions, inflationary pressures, and supply-chain issues remain elevated.

Notably, two lines are behaving counter-cyclically to the broader softening market: general liability and medical malpractice. WTW attributed this to substantial concerns around social inflation, so-called nuclear jury verdicts, and the expansion of third-party litigation funding — factors that continue to push up loss-cost expectations in these casualty lines and limit the scope for rate reductions. WTW said it does not view the current softening conditions as sustainable in the long term, though the timing and nature of any correction remain uncertain. The survey captured around $250 billion of gross written premium over a 10-year cycle, including $45 billion in 2025, and is built exclusively on data contributed directly by participating insurers rather than broker-derived estimates. WTW's next SIMS update will be based on H1 2026 results and the July renewals.