Finding reliability in a fragmented property-insurance market

Instead, pricing momentum shifted sharply by the end of the first quarter of 2025. Rates declined unevenly. Rather than moving in lockstep, individual carriers and program layers responded differently based on appetite, capital deployment strategies, and reinsurance dynamics.

For brokers, this created an environment in which familiar benchmarks no longer applied. Programs that once moved as cohesive units are now subject to competing behaviors within the same structure.

Who is driving today's volatility

After an extended hard market, many insurers are recalibrating their approach to capital deployment, growth pursuit, and where they are willing to compete. At the same time, brokers are encountering a broader mix of established markets, returning capacity, and newer entrants, all of which bring different pricing philosophies to the table.

The result is a market where activity is high, but alignment is low. Rather than moving in unison, carriers are pulling in different directions, creating friction within individual programs. Several interconnected forces are converging to produce that volatility:

• Capacity expanded faster than demand: More insurers are participating in the same programs than the structures require in primary and lower excess layers. Carriers seeking top-line growth after a prolonged hard market drive this influx, as well as new or returning entrants eager to deploy capital quickly.
• Rate compression accelerated: Early 2025 saw average decreases in the 5%–10% range. By the second quarter, reductions deepened into the 10%–20% range, with some individual layers seeing significantly larger declines, even on accounts with loss activity. That pace of movement is unusual in commercial property and challenges traditional renewal expectations.
• Limits expand as carriers compete for relevance: Primary markets that historically offered $5 million to $10 million now extend up to $25 million. Excess markets that once deployed $25 million are pushing higher. While these moves increase optionality, they also shift the distribution of risk across programs.
• Pricing misalignment is common at the layer level: Excess layers, facing heightened competition and lower loss frequency, are priced aggressively, sometimes disproportionately so. When adjacent layers are priced illogically relative to exposure, the internal logic of the program begins to erode.

These forces collectively reshape competitive behavior across the property market. As underwriting approaches diverge and capacity is deployed inconsistently, the result is a market that no longer behaves uniformly.

Where fragmentation shows up most clearly

The effects of this volatility are visible across nearly every property class, including those that were recently among the most constrained.

Catastrophe-exposed risks, particularly in Florida, have seen softening. Standard markets, Managing General Agents (MGAs), and traditional competitors are all actively competing on ground-up limits. Sectors that faced significant headwinds just a year ago, such as food manufacturing and agriculture, now benefit from renewed interest and improved pricing dynamics.

Brokers are left reconciling how multiple carriers assess the same risk so differently, notably when pricing diverges sharply within a single program.

When more capacity creates new risks

At first glance, abundant capacity appears beneficial. In practice, capacity without coordination can undermine program stability.

Large limits offered at unusually low prices can disrupt pricing relationships across the tower. In some cases, brokers have even requested modest price increases from carriers to preserve structural credibility. When one layer is priced far below its peers, it can raise client concerns and invite scrutiny into the program's sustainability.

This risk is heightened when short-term deployment strategies drive capacity. Reinsurance-dependent or "use it or lose it" capacity may deliver immediate savings, but it's not always durable. A deeply discounted layer at placement can be a source of disruption at renewal if the carrier retrenches or exits the market.

Over time, those disruptions cost brokers more than they save in re-marketing efforts and client trust.

Why consistency is gaining strategic value

Against this backdrop, brokers reassess what differentiates carrier partners. Competitive pricing remains important, but predictability and follow-through now carry equal weight.

Carriers that maintain a clear underwriting appetite, empower underwriters to make binding decisions, and communicate consistently enable brokers to build programs with confidence. Proximity speeds execution, but alignment sustains relationships.

When brokers understand how a carrier will quote and how they will behave across cycles, they can structure programs that endure. That reliability becomes especially valuable when market conditions shift again, as they inevitably will.

The question beneath every renewal

As renewal activity increases, brokers focus on capacity, pricing, and execution speed. But in a volatile market, those factors alone are no longer sufficient. The ability of a carrier to remain consistent and committed through changing conditions is now central to renewal decisions.

Programs built on disciplined, predictable partnerships are better positioned to withstand softening and tightening conditions. In a fragmented market, consistency holds everything together.

Derek Hall is the president for the Specialty Property division of Intact Insurance Specialty Solutions. He joined Intact in 2020 as the CUO before taking over as president in 2022. He has 30 years of industry experience, including 25 years in Excess & Surplus Lines.

This article is published with permission and may not be reproduced.

(Image credit: Uladzislau/Adobe Stock)

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