There are a number of steps agents and brokers can take to help insureds navigate choppy waters. (Credit: jozefmicic/Adobe Stock)

The long-awaited soft market transition is finally happening for many commercial lines, according to research from The Council of Insurance Agents and Brokers (CIAB).

Specialty casualty lines such as commercial auto and private security firms, however, remain stubbornly entrenched in hard market realities.

Such a prolonged period of elevated rates and constrained capacity creates a fascinating paradox. On one hand, the specialty market continues to grow rapidly, with the expectation it will reach $279 billion by 2031, according to Deloitte. At the same time, specialty lines carriers face the hardest market conditions seen in nearly three decades, creating new challenges for both insurers and the agents and brokers who partner with them.

As a program administrator protecting businesses in niche industries such as security guard firms and pest control businesses for 75 years, our team at the Brownyard Group has navigated multiple market cycles. This particular market cycle has been rather extraordinary. Fortunately, while there are several unique factors shaping specialty lines, there are also a number of steps agents and brokers can take to help insureds navigate these choppy waters.

External forces intensify

A confluence of macroeconomic and legislative trends are intensifying the pressure on specialty lines. Social inflation is impacting recovery costs, driving up the cost of claims across almost all casualty lines. Skyrocketing jury awards are also a contributing factor, with the number of verdicts over $100 million nearly doubling from 2023 to 2024, according to Marathon Strategies' most recent Nuclear Verdicts Report.

While the impact of these two forces varies by line of business, niche sectors like security have been hit particularly hard. Global geopolitical unrest has led to an increase in violent attacks and active shooter events at public places such as malls and universities, putting security professionals on the front lines of an increasingly unstable and potentially dangerous social climate.

Couple these increased security risks with rising inflation and multimillion-dollar verdicts, and specialty insurers face a perfect storm of hard-to-navigate forces. In response, we have seen some insurers, Managing General Agents (MGAs) and program administrators withdraw from the class entirely. Those that remain are non-renewing accounts, reducing coverage limits and implementing significant rate increases to stay profitable.

Given this climate, it is perhaps no surprise we are also seeing an uptick in consolidation activity, with larger organizations acquiring small- to midsize specialty providers. This active mergers and acquisitions (M&A) environment is expected to continue throughout 2026.

AI offers hope

Insurers may have little control over external market factors, but they can weather the storm by improving underwriting accuracy and streamlining processes. In both situations, artificial intelligence (AI) and advanced analytics bring great promise. A recent WTW survey found insurers with more sophisticated analytics capabilities outperformed slower adopters, achieving combined ratios that were six points lower and premium growth that was three points higher from 2022 to 2024.

While data and AI can help improve underwriting, technology-enabled safety programs can help insureds chip away at one of the hardest parts of the current market: commercial auto. WTW expects rates in this sector to increase by 8% to 20% in 2026, further increasing already elevated premiums.

To help insureds keep premiums in check, agents and brokers should consider recommending businesses add telematics devices and dashboard cameras to their loss prevention strategies. Both technologies help companies curb dangerous behaviors such as speeding and distracted driving that cause accidents and create claims. They also provide data insureds can use to enhance their driver training and coaching programs.

Navigating the hard market

With the specialty insurance market evolving rapidly, agents and brokers in niche markets, such as the security guard space, should consider remaining flexible and responsive. By focusing on these three areas, producers can secure adequate coverage for their insureds and find best-in-class carrier, MGA and program administrator partners:

  • Help clients look beyond the premium: The hard market is leading many businesses in the specialty space to shop their coverage and switch to carriers that offer significant premium savings. Doing so, however, can leave an organization woefully underinsured, especially if their new policy excludes specific coverages required by clients. When this happens, brokers and insureds must scramble mid-term to find replacement coverage or lose a client. A smarter approach is to encourage insureds to seek adequate coverage first and consider premium second. While this may not be what insureds want to hear, it is the best way for them to protect their staff and secure their business.
  • Provide personalized services: In complex specialty classes, responsiveness and direct communication remain critical to maintaining strong broker-carrier relationships. Replying to calls and emails promptly is table stakes. A true differentiator, especially in today's digital-first age, is having a human from the office (and not a call center) answer the phone. This simple act surprises and delights clients, demonstrating you put their needs first.
  • Seek strong partners: Align yourself with dependable insurers who have a proven track record of success. Partners with decades of experience will understand the ups and downs of market conditions, providing guidance and stability. Agents and brokers should also consider investing in their agency's employees. Building an experienced internal team strengthens customer loyalty and improves service delivery.

Meet the moment

Evolving risks in security guard insurance and other specialty niches continue to create strong demand for tailored coverage solutions despite the hard market. Agents and brokers who choose dependable partners and prioritize personalized service will be able to thrive regardless of external market forces.

Tory Brownyard, CPCU, is president of Brownyard Group, an insurance program administrator with specialty programs for select industry groups. In addition to his responsibilities as president, he currently spearheads the Browngard® security guard insurance program. Opinions expressed here are the author's own.

(Featured image credit: jozefmicic/Adobe Stock)

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