Emerging market complexities could reshape the property and casualty insurance landscape after the industry enjoyed steady premium growth and record underwriting profits in 2025, panelists on a recent Lockton webcast said.
Slowing economic growth, rising geopolitical tensions, increasing social inflation, emerging artificial intelligence (AI) technology, and catastrophe exposure are among the risks to last year’s strong market discipline.
“We are only one quarter into 2026, but I think it’s safe to say it’s been a really dynamic year, and it feels like every week brings a new headline or challenge,” said Vince Gaffigan, U.S. Market Strategy & Engagement Group Leader.
Most buyers of workers’ compensation, for example, saw flat-to-declining rates in the fourth quarter of 2025, the culmination of decades of fewer claims and ample reserves. Still, several risks could drive workers’ compensation rates back up for buyers. Medical and wage inflation make claims more expensive. Presumptions for mental health and cancer could make workers’ compensation insurance more expensive.
Similarly, buyers enjoy a price-friendly environment for cyber policies, particularly those companies that follow effective cybersecurity practices. But the rise of artificial intelligence increases both internal risks and cybercriminal capabilities, which could lead to more frequent, severe, and unpredictable losses.
“On the AI front, it’s going to continue to develop,” said Michelle Faylo, U.S. Cyber and Technology Leader for Lockton. “But I would [recommend] assessing how you’re using AI. How are you using it now? How do you plan on using it in the future? What are the internal demands, external demands around it? Are there unauthorized tools that employees are using?”
Lockton panelists emphasized maintaining strong relationships with carriers while also exploring the market. Buyers should strategically leverage profitability in certain lines, such as workers’ compensation, to negotiate with carriers.
And buyers should collect sophisticated and detailed data when making claims or drafting a submission for a policy renewal. Buyers who can tell an effective, transparent, and data-driven story to carriers when making claims or submissions can separate themselves in today’s market.
“Underwriters are being far more selective,” said Peter Rapciewicz, U.S. Casualty Leader for Lockton. “So the quality of your story does matter.”
Watch a replay of the webcast for more insights, and read the Lockton Market Update here (opens a new window).