The property market continues to soften in select market segments. Underwriters continue to apply rigorous risk assessment of assets that may be exposed to perils or comprise hazardous materials. The minor exception to this is in instances whereby underwriting guidelines are “non-existent” in which case, insurers are actively seeking to retain business. Insurers have become more willing to offer long-term agreements, locking in premium rates for periods of up to 2 or 3 years to mitigate rate increases.
We have also noted that despite strict risk assessment standards from insurers, many Managing General Agents (underwriting agencies) are reducing rates heavily to retain business.
Those in flood prone and cyclone exposed regions still face elevated premiums and tighter coverage terms including sub-limited coverage or an increased excess, deductible or retention applying.
AI is becoming more commonplace to assess weather perils and drive risk assessment by insurers. Parametric (weather derivatives) remain a viable option to transfer exposures to catastrophic perils on particular assets such as those situated in high-risk coastal zones or islands.
A recent report by Clyde & Co highlights new emerging risks for 2026, including:
- Litigation funding, in particular transparency and conflicts of interest,
- Sanctions linked to escalating geopolitical tensions,
- Head Office Liability as parent companies are being held responsible for the actions of overseas subsidiaries.
For property markets, this has translated into heightened scrutiny of corporate governance and supply chain resilience as regulatory frameworks such as CPS 230 in Australia push insurers to strengthen their own operational resilience and governance (which may impact insurers viability in future).
We have observed property insurance markets are trending toward more bespoke product offerings by sector. Renewable energy, advanced manufacturing, childcare and logistics hubs are recent examples of bespoke product forms, that have specific enhancements to cater for the respective industries’ exposures.
Whilst industrial real estate remains attractive to investors, insurers remain wary of hidden risks for such premises including fire safety, cyber vulnerabilities (particularly those with automated warehouses) and supply chain disruptions which may arise from an insured event which could drive future property losses.
Looking forward
We would highlight that:
- Building costs are rising due to inflation and will in time have an impact on premiums.
- Assets should be valued accurately and on a regular basis by external professionals to ensure replacement values are correct to avoid co-insurance or underinsurance.
- Engineers may be able to support an overall risk mitigation strategy by working closely with policyholders to implement cost effective risk management decisions, balancing insurance protection with practical loss prevention measures which invests in the assets long-term.
Apac catastrophe losses and changes over time
Source: Guy Carpenter
Continue reading our full range of market updates:
- Insurance Market Overview: January 2026
- Claims
- Workers Compensation
- Corporate and Multinational Risk
- Construction, Property and Development
- Financial Lines
